Presumptive Revenue Level Assessment Approach (PRLAA) Ordinance

December 5, 2017 Excerpt from the Minutes of the 65th Regular Session of the 18th Sangguniang Panlungsod, City of General Santos, Held at the Sangguniang Panlungsod Session Hall on Tuesday, December 05, 2017. WHEREAS , the Philippines rates poorly on ease in doing business; WHEREAS , President Rodrigo Roa Duterte pronounced during his inaugural speech last June 30, 2016 and State of the Nation Address (SONA) on July 25, 2016 for all government agencies to reduce the requirements and processing time of all government transactions; WHEREAS , the Department of the Interior and Local Government (DILG), Department of Trade and Industry (DTI) and Department of Information and Communications Technology (DICT) issued Joint Memorandum Circular No. 1, Series of 2016, as amended imposing performance standards in processing for streamlining the Business Permit and Licensing System (BPLS); WHEREAS , local governments and regulatory offices should work together to streamline the procedures, especially as more and more businesses are acquiring business permits, hence, the unnecessary steps in the system should be removed and the whole system be made less complex; HTcADC WHEREAS , the city has committed to streamline the process for securing a business permit to three (3) steps and to reduce the number of forms, visits, face to face interactions and permit processing time; WHEREAS , automation is necessary to implement the streamlined process, and attain the less than one (1) day processing of business permit; WHEREAS , the city aims to achieve a 50:50 ratio on revenues derive from local sources and Internal Revenue Allotment (IRA) within a 6-year period; WHEREAS , the City Government of General Santos strives to provide a business friendly environment towards achieving sustainable economic development; WHEREAS , the basis for computation of tax is the actual gross sales or receipts of the business establishment but audited Financial Statement and Annual Income Tax Return is not yet available come renewal of business permit; WHEREAS , Bureau of Local Government Finance (BLGF) Memorandum Circular No. 01-001-2017 provides the passage of an ordinance to support the utilization of Presumptive Revenue Level Assessment Approach (PRLAA) in estimating the gross sales or receipts of businesses as a basis for assessment of Local Business Tax (LBT) by the City Treasurer or his authorized representative; NOW, THEREFORE , on motion of City Councilor Franklin M. Gacal, Jr., duly seconded by City Councilors Elizabeth B. Bagonoc, Shandee Theresa O. Llido-Pestao and Brix T. Tan, be it RESOLVED , as it is hereby resolved, to enact this Ordinance: GENERAL SANTOS CITY ORDINANCE NO. 059-17 AN ORDINANCE ADOPTING THE PRESUMPTIVE REVENUE LEVEL ASSESSMENT APPROACH (PRLAA) IN THE ASSESSMENT OF BUSINESSES IN THE CITY OF GENERAL SANTOS AND PRESCRIBING CERTAIN PERCENTAGE IN THEIR GROSS SALES AS BASIS FOR ASSESSMENT OF BUSINESS TAX DURING THE BUSINESS RENEWAL PERIOD Hon. Franklin M. Gacal, Jr. Author/Sponsor SECTION 1. Short Title . This Ordinance shall be known as the "PRESUMPTIVE REVENUE LEVEL ASSESSMENT APPROACH (PRLAA) Ordinance." SECTION 2. Scope and Application . This Code shall govern the assessment, and collection of taxes, fees, charges and other impositions within the territorial jurisdiction of this City. SECTION 3. Construction of Provisions . Words and phrases embodied in this Ordinance not herein specifically defined shall have the same definitions as found in the General Santos City Revenue Code of 1996 and RA 7160, otherwise known as the Local Government Code (LGC) of 1991. SECTION 4. Definitions . As used in this Ordinance: a) Presumptive Revenue Level Assessment Approach (PRLAA) mere estimate based on assumptions or indicators. The use of PRLAA proceeds from the necessity of assessing reasonable amount of tax without the benefit of an audit by an authorized revenue examiner who has the reason to believe that the amount of gross sales declaration is understated caused by human tendency of many businessmen to understate their income. Presumptive Revenue assessments are implemented where the assessment or collection of tax is determined to be in jeopardy. Under such circumstances, the LGUs, in the exercise of prudence, may make an immediate assessment without following the procedures required for an ordinary assessment, and then may proceed to collect the tax as assessed without delay. b) Jeopardy Assessment refers to an assessment which was assessed without the benefit of a complete or partial audit by an authorized revenue officer who has reason to believe that the assessment and collection of tax will be jeopardized by delay because of the taxpayer's failure to comply with the audit and investigation requirements to present his books of accounts and/or pertinent records to substantiate all or any of the deductions, exemptions or credits claimed in his return. SECTION 5. Imposition of Presumptive Revenue Level Assessment (PRLA) . There is hereby imposed on the following persons who establish, operate, conduct or maintain their respective business within the City a certain percentage over the previous year's gross sales declaration hereafter prescribed: 1) 15% increase of declared gross sales in the preceding year and provided that the declared gross sales does not reach the maximum amount of the scheduled fixed tax as provided by the General Santos City Revenue Code. 2) 5% increase of declared gross sales in the preceding year if declared gross sales are beyond the maximum amount of the scheduled fixed tax as provided by the General Santos City Revenue Code. 3) In the case of businesses subject to fixed rates such as amusement places, printing and publication, banking institutions and other non-bank financial intermediaries, and the like, a 5% increase on the declared gross Sales in the preceding year shall be applied. aScITE In case the actual gross sales or receipts as recorded in the books of accounts is higher than the PRLAA prescribed in this section, the taxpayer may apply to the Business Taxes and Fees Division (BTFD) of the City Treasurer's Office for immediate reassessment to reflect their actual gross sales, upon receipt of their notice of assessment or billing statement and before payment of taxes and fees. Provided, however, that failure on the part of taxpayer to apply for reassessment reflecting his/her actual gross sales, does not constraint the City Treasurer from collecting deficiency tax, penalty and interest as a result of the latter's conduct of examination. SECTION 6. Taxpayer's Remedies . a) In the event the taxpayer disagrees on the assessment of the City Treasurer or of his authorized representative based on the PRLAA as a result of the implementation of this ordinance, the taxpayer may pay the tax for at least a quarter under protest. b) Within 60 days from receipt of notice of assessment or billing statement, the taxpayer shall protest in writing to the City Treasurer requesting for a reassessment based on the actual gross sales of the business establishment through submission of the books of accounts and other pertinent documents. c) The city treasurer shall decide the protest within sixty (60) days from the time of its filing. If the City Treasurer finds the protest to be wholly or partly meritorious, he/she shall issue a notice cancelling wholly or partially the assessment. However, if the City Treasurer finds the assessment to be wholly or partly correct, he/she shall deny the protest wholly or partly with notice to the taxpayer. d) In case of disagreement between the taxpayer and the City Treasurer in determining the gross sales or receipts thru PRLAA, the taxpayer has the option to elevate the matter to the City Business Tax Mediation Board within 5 days from the receipt of denial of protest or from the lapse of the 60-day period. SECTION 7. City Business Tax Mediation Board . For purposes of mediation, there is hereby created the City Business Tax Mediation Board composed of: Chairperson: Chairperson of the City Council Committee on Finance, Ways and Means and Appropriations Members: 1) SP-Chair of the City Council Committee on Trade & Commerce 2) DTI City Director 3) President of the GSC Chamber of Commerce 4) President of the South Cotabato Filipino Chinese (SCFC) Chamber of Commerce 5) Representative of the Philippine Institute of Certified Public Accountant (PICPA) 6) City Legal Officer A staff of the City Treasurer's Office to be designated by the City Treasurer shall serve as Secretary of the Board. SECTION 8. Meetings and Quorum . The board shall have the authority to decide on the frequency of its meetings and what constitutes quorum. SECTION 9. Function of the Board . The Board shall mediate all protests related to the denial of the City Treasurer in so far as the latter's determination of the gross sales or receipts using the PRLAA of the taxpayer and other related tax assessment and liabilities before an appeal is made. SECTION 10. Mediation Procedure . a) Before an appeal is made, the taxpayer may refer the subject of his/her protest to the City Business Tax Mediation Board within five (5) days from the receipt of the denial or from the lapse of the 60-day period prescribed in Section 6 (c). b) Proceedings for the mediation shall commence upon receipt of his/her written protest, copy of the denial and taxpayer's records from the City Treasurer's Office. c) The Board shall within 3 days set the date of the hearing. d) The parties must appear in person or his/her authorized representative. e) The Board proceedings shall in no case exceeds the 30 days appeal period. f) Any settlement during the mediation shall be considered final, binding and executory. g) Either party may repudiate such agreement any time before the lapse of the period to appeal. h) Appeal to the court by the taxpayer shall be in accordance with the Rules of Court. SECTION 11. Publication of the Ordinance . Within ten (10) days after its approval, a certified copy of this Ordinance shall be published in full for three (3) consecutive issues in a newspaper of local circulation. HEITAD SECTION 12. Public Dissemination of this Ordinance . Copies of this Ordinance shall be furnished to the City Treasurer for public dissemination. SECTION 13. Separability Clause . If for any reason, any section or provision of this Ordinance shall be held to be unconstitutional or invalid by competent authority, such judgment or action shall not affect or impair the other sections or provisions thereof. SECTION 14. Applicability Clause . All other matters relating to the impositions in this Ordinance shall be governed by pertinent provisions of existing laws and other ordinances. SECTION 15. Repealing Clause . All ordinances, rules and regulations, or part/s thereof, in conflict with, or inconsistent with any provision of this Ordinance are hereby repealed or modified accordingly. SECTION 16. Effectivity Clause . This Ordinance shall take effect after 15 days following its publication in a local newspaper of general circulation for three (3) consecutive issues. ENACTED by the 18th Sangguniang Panlungsod, City of General Santos on its 65th Regular Session held on December 5, 2017. CERTIFIED CORRECT: (SGD.) ATTY. ROSENDO A. ROQUE Secretary to the Sanggunian ATTESTED BY: (SGD.) SHIRLYN L. BAAS-NOGRALES City Vice Mayor and Presiding Officer Approved by His Honor, the City Mayor on December 13, 2017. (SGD.) RONNEL C. RIVERA City Mayor