CITY treasurer's department of the Cagayan De Oro is now reviewing the viability of pursuing the revisions of 2015 Tax Code, said City Council's committee on Ways and Means chair Councilor George Goking Saturday.
In a statement, Goking said a fiscal consolidation plan that will minimize whatever long-term economic scarring may occur as a result of the coronavirus-induced crisis and the budgetary implication of the Supreme Court’s (SC) 2018 ruling that expands the share of local government units (LGUs) on national government taxes.
"For now, we need all reports from the city’s revenue generating departments for data consolidation which has not yet been reported by the city treasurer," said Goking.
City treasurer Jasmin Maagad, according to Goking was appointed as head of the technical working group to lead for the revision of the said Tax Code of 2015.
“Investing more in infrastructure, social services and climate action to stimulate growth as the city government begins the urgent task of outgrowing its pandemic-induced debt,” Goking said.
Earlier, even the national department of finance according to Goking said was “doable” with the support of the nation’s taxpayers and the sustained strong performance of the Bureau of Internal Revenue (BIR),.
He even said that because of the pandemic, the new generation of entrepreneurs and emerging businesses in the new economy should be reminded of their duty to ensure that the city moves forward through their prompt and correct payment of taxes.
“The revision of the Tax Code of 2015 is delayed due to the pandemic,” Goking said.
The amended tax code is also necessary due to the new SC ruling, he said adding which refers to the expanded National Tax Allotment (NTA), formerly known as the Internal Revenue Allotment (IRA) for LGUs, that took effect on February 22, this year.
He stressed that the tax revenue losses from the pandemic-induced economic slump, the rise in debt to fund the Covid-19 response, the reason why the SC widen the LGU share.
The SC decision to expand the share of LGUs from the NTA is basically due to the looming revenue impact of economic recovery measures, and lower spending efficiency as reported by the finance department, Goking said.
“It must be adequately addressed by the next administration’s economic team,” said Finance secretary Dominguez said in a statement.
Covid-19 related loans for the pandemic response and budgetary support to finance the deficit have also translated into increased financing costs for the government, it said.
DOF estimates found that implementing the High Tribunal’s 2018 decision will yield 3 percent lower economic growth because the higher LGU allocation will be subject to a lower spending efficiency. (Ben Balce)
