ArchivesSeptember 2010Dgte boom felt amid low tax take

Dgte boom felt amid low tax take

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Dumaguete City Mayor Manuel Sagarbarria has appealed to businessmen to increase their tax payments to the City to ensure the continued delivery of basic services. {{more}}

Sagarbarria made the call in an interview after he noted that the supposed economic boom of Dumaguete due to the entry of call centers and other Information Communication Technology (ICT)-based businesses has not resulted in a corresponding increase in business taxes.

“Percentage wise, the taxes have even gone down over a three-year period,” the mayor said.

The business community had painted a rosy picture of a booming Dumaguete economy last year with the employment of about 3000 workers in call centers and ICT businesses. While these businesses are still enjoying a business tax holiday for the first five years, they are expected to pump in more than P20 million every month to the Dumaguete economy in salaries to their workers.

“The families of these 3000 workers would translate to about 15,000 people who directly benefit from the operation of these call centers,” said Engr. Gregorio Uymatiao Jr., chairman of the Negros Oriental Business Development Foundation during an investment forum in Dumaguete last week. “This is already good for the City.”

The entry of call centers, and the increased flow of money into the Dumaguete economy, is thought to benefit other industries in the City like the hotel and restaurant industry and the construction industry, among others.

Sagarbarria, however, said that the increased economic activity has also resulted in an increase in the Dumaguete population which has also increased the demand for services in the City.

“Now, people want more lights on the streets, more policemen to patrol the streets, and there is also more garbage to collect. But we are hard put in responding to these needs because we do not have enough taxes,” Sagarbarria said.

Last year, the City collected P160 million in local taxes and got about the same amount in Internal Revenue Allotment. It operates on a P400 million annual budget.

Sagarbarria said that in January 2011, the City will need an additional P24 million to pay government workers under the Salary Standardization Law. “Where will I get the money to pay for that? If there is no increase in tax collection, some of the City’s services will surely be affected,” he said.

He said that the City does not have money to hire policemen. The National government is supposed to give the Dumaguete Police Station 300 policemen but the budget from the PNP is only good for 80.

This paradox of a low tax take amid a supposedly booming economy has also puzzled officials of the Bureau of Internal Revenue in Dumaguete City.

A BIR official, who asked not to be identified, said they have been conducting surveillance activities on restaurants and other business who are expected to benefit from the supposed Dumaguete boom so they could also get more taxes for the national government.

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