An Ordinance Amending Certain Provisions of Provincial Revenue Code of 2010

November 29, 2011 Excerpt from the Minutes of the Regular Session of the 10th Sangguniang Panlalawigan ng Iloilo, Held in the Session Hall of the New Iloilo Provincial Capitol, Bonifacio Drive, Iloilo City on November 29, 2011. PRESENT: Hon. Oscar "Richard" S. Garin, Jr. Presiding Officer Hon. Macario N. Napulan Floor Leader Hon. Gerardo N. Flores Member Hon. June S. Mondejar Member Hon. Demetrio P. Sonza Member Hon. Licurgo P. Tirador Member Hon. Emmanuel R. Gallar Member Hon. Hernan G. Biron, Jr. Member Hon. Shalene Palmares-Hidalgo Member Hon. Nielo C. Tupas Member Hon. Jett C. Rojas Member Hon. Suzette Tenefrancia-Alquisada Member (President, PCL) ON LEAVE: Hon. Jeneda Salcedo-Orendain Member (Pres.,Liga ng mga Brgy.) Hon. Charmine Padernal Devicente Member (PPSK President) ILOILO PROVINCIAL ORDINANCE NO. 090-11 AN ORDINANCE AMENDING CERTAIN PROVISIONS OF PROVINCIAL REVENUE CODE OF 2010 Sponsored by: Hon. Jett C. Rojas WHEREAS, the Committee on Ways and Means, to which the proposed amendments to the existing Provincial Revenue Code of the Province of Iloilo, Provincial Ordinance No. 2010-084, Series of 2010 , were referred, held a public hearing on the matter last October 11, 2011. The public hearing was attended by Atty. Dennis Ventilacion, Provincial Legal Officer and Vice-Chairman of the Bids and Awards Committee, Dr. Melba Sullivan, Provincial Treasurer, Mr. Felixberto S. Peaflorida, Assistant Provincial Assessor, Engr. Gracianito Lucero of the Provincial Engineering Office and representatives from various business establishments. cSaATC WHEREAS, while the Provincial Government is reluctant to impose additional burdens on the taxpayers, it cannot avoid its obligation to deliver basic services to its constituents. A review by the Provincial Bids and Awards Committee of the Provincial Revenue Code of the Province of Iloilo showed that some of its provisions have not kept pace with current and recent developments and are not at par with the rates and fees imposed by other provinces. Thus there is a need to review and make certain adjustments in the current rates and fees imposed by the Provincial Revenue Code, to wit: First proposed amendment: CHAPTER II TAX ON TRANSFER OF REAL PROPERTY OWNERSHIP. A new section was proposed to be added, to read as follows: Section 11. Surcharge and Penalties for late payment . Failure to pay the tax within the period of sixty (60) days as herein provided shall be subject to a surcharge of Twenty Five Percent (25%) and an interest of Two (2%) per month from the date it is due including surcharges until it is paid, but in no case shall the total interest on the unpaid amount or portion thereof exceed thirty six (36) months. This new addition deals with the late payment of transfer tax of real property and not found in the existing Revenue Code. It is provided in Section 10 thereof that the transfer tax shall be paid within sixty (60) days from the date of the execution of the deed or from the date of the death of the property owner. However, said transfer tax is not usually paid within the sixty (60) day period. Therefore, said additional section is to encourage the taxpayers to be prompt in the payment of the transfer tax and in the transfer of real property ownership. Dr. Melba Sullivan, Provincial Treasurer, has explained that if the transfer of real property ownership is not processed immediately, her office will have difficulty locating the new owner and assessing who will be responsible for the payment of the real property tax. It was further emphasized that the surcharge and penalty imposed under the proposed section are not adjustments of the existing tax rate but only penalties for late payment of transfer tax , thus, the proposed amendment does not violate the provision of Section 191 of the Local Government Code which prohibits adjustment of tax rates more than once every five (5) years. Second proposed amendment: CHAPTER III TAX ON BUSINESS OF PRINTING AND PUBLICATION. CHTAIc Two additional sections were proposed to be added, to read as follows: 1) Section 15. Time, Place and Manner of payment . The tax shall be paid to the Provincial Treasurer or his duly authorized deputies within the first twenty (20) days of January of every year . The tax imposed in this Chapter shall be due and payable in quarterly installments to the Provincial Treasurer within the first twenty (20) days following each quarter. In the case of a newly started business, the tax shall be paid before the business starts to operate. The proposed Section 15 is just a reiteration of the existing Section 16 of the Provincial Revenue Code with only an additional paragraph stating that taxes on Business of Printing and Publication should be paid within the first twenty (20) days of January of every year. Dr. Melba Sullivan, Provincial Treasurer, has explained that all business taxes as mandated by the Local Government Code should be paid by the taxpayer on or before January 20 of each tax year. It appears, however, that this has not been specified by the existing Revenue Code. The existing Revenue Code merely states that taxes are payable every first twenty (20) days following each quarter. The additional first paragraph proposed to be added to Section 15 will pertain to business taxpayers who would like to pay their tax on Printing and Publication for the whole year ending January 20 . However, if the taxpayer chooses to pay his taxes quarterly, he can still do so without penalty within the first 20 days of the first month of each quarter. The proposed Section 15 involves only the time and manner of payment and not an adjustment of tax rates and therefore not a violation of Section 191 of the Local Government Code. 2) Section 16. Surcharge and Penalties for late payment . Failure to pay the tax on the date due shall be subject to a surcharge of Twenty Five Percent (25%) plus interest of Two Percent (2%) per month from the date it is due including surcharges until it is paid, but in no case shall the total interest on the unpaid amount or portion thereof exceed thirty-six (36) months. The proposed Section 16 on Chapter III refers only to penalties for late payment of the business tax, hence, not a violation of Section 191 of the Local Government Code. Third proposed amendment: CHAPTER VIII ANNUAL FIXED TAX FOR DELIVERY TRUCK OR VAN OF MANUFACTURERS OR PRODUCERS, WHOLESALERS OF DEALERS OR RETAILERS IN CERTAIN PRODUCTS/SERVICES A new paragraph is proposed to be added in the existing Section 99 of Chapter VIII, which shall be the new Section 101 to read as follows: Failure or refusal to pay the herein imposed tax shall be sufficient ground/cause for the Provincial or Municipal Treasurer's Office as the case may be, through the duly deputized agents or representatives to apprehend, take into custody, detain or impound the subject vehicle. This additional paragraph is proposed to be added to further encourage payment of the annual fixed taxes. Fourth proposed amendment: CHAPTER IX REAL PROPERTY TAX An additional phrase to the existing Section 113, which shall be the new Section 115, is proposed to read as follows: Section 115. Tax discount for advance and prompt payment . ....If payment is made in full for the forthcoming years, the taxpayer should be granted a discount not exceeding twenty (20%) of the annual due, provided payment should be made on or before October 31 of the current year . The existing Section 113 actually gives an incentive for advance payment. The Provincial Treasurer explained that, for example, the taxpayer pays his 2012 Real Property Tax this year, he can pay it on or before December 31 and he will be given a discount of twenty percent (20%) instead of the usual prompt payment of 10%.However, based on the experience of the Provincial Treasurer's Office, the taxpayer would usually wait up to the last day, December 31, to pay the real property tax. Since December 31 is usually declared a holiday, the taxpayer is still allowed to pay in January of 2012 and would still be enjoying a 20% discount. The allowed late payment actually defeats the purpose and essence of advance payments as provided under the existing Section 113 in as much as the late payment could no longer be used for the current year. Thus, there is the need to require advance payments on or before October 31 of the current year. The proposed amendment of the existing Section 113 does not include any adjustment on any tax rate. It merely involves the time of payment and is not covered by the prohibition under Section 191 of the Local Government Code. Fifth proposed amendment: CHAPTER XIV BIDS AND AWARDS COMMITTEE FEES The proposed amendments under this Chapter are on rates of the Bidder's Tender and the Infrastructure and Consultancy Fees. The proposal is to adopt the existing rates of the Department of Public Works and Highways ,as follows: EATCcI A. Bidder's Tender Cost of Goods Rate P1,000,000.00 and below P1,000.00 1,000,000.00-5,000,000.00 5,000.00 5,000,000.00-20,000,000.00 10,000.00 20,000,000.00-50,000,000.00 20,000.00 50,000,000.00-100,000,000.00 30,000.00 Above 100,000,000.00-500,000,000.00 40,000.00 B. Infrastructure and Consultancy Cost of Goods Rate P1,000,000.00 and below P1,000.00 1,000,000.00-5,000,000.00 5,000.00 5,000,000.00-20,000,000.00 10,000.00 20,000,000.00-50,000,000.00 20,000.00 50,000,000.00-100,000,000.00 30,000.00 Above 100,000,000.00-500,000,000.00 40,000.00 The existing rates in the Provincial Revenue Code are still in the 1992 level. Based on the experience of the Provincial Treasurer's Office during their biddings especially on infrastructures, the bid amount for buying the bid document is no longer enough to buy the needed materials, mimeographing, photocopying and other expenses for the bid documents. Thus, the need to amend the existing fees to keep abreast with the increasing costs and expenses. An additional item was proposed to be added as: C. Accreditation of Suppliers P1,000.00 The proposed fee on Accreditation of Suppliers is not actually a requisite for bidding. Even without accreditation, a person/entity can still participate in the bidding. The accreditation is only for purposes of easy facilitation of the bid since there is no more need of submission of documents once a bidder has already been accredited. Moreover, the accreditation fee is an additional income to the provincial government. Sixth proposed amendment: CHAPTER XV RENTALS FOR REAL PROPERTY The proposed amendment on the existing Section 159, which shall be the new Section 161, is as follows: Section 161. Lease of Real Property . A) Real property owned by the Province may be leased for consideration, and for such terms and conditions, as may be approved by the Sangguniang Panlalawigan. B) Real properties of the Province acquired through various auctions sales may be leased at a rate as may be determined by the members of the Appraisal Committee, composed of the Provincial Treasurer, Provincial Assessor and the Provincial Engineer, subject to the approval of the Sangguniang Panlalawigan . Item A is already found in the existing Section 159 of the Revenue Code. This item pertains to the properties owned by the Province of Iloilo such as Conference Rooms, Iloilo Provincial Grounds, etc. while Item B would pertain to real properties acquired through various public auction sales . The Province of Iloilo has numerous real properties acquired by reason of the failure of the owners to pay real property taxes. However, the acquired assets have remained idle and still in the possession of the previous owners who are delinquent taxpayers and since the properties are already owned by the Province of Iloilo, the possessors are no longer liable to pay real property taxes to the detriment of the Province of Iloilo. Item B was, therefore, proposed to compel these delinquent taxpayers to pay for the rentals of the said real properties and to enable the Provincial Government to earn from these idle properties. Furthermore, the power of the Appraisal Committee under Item B is only to recommend the rate of the rentals. WHEREAS, the foregoing proposed amendments to the Provincial Revenue Code do not violate any provisions of the Local Government Code. Moreover, per comment of Atty. Teopisto Melliza of the Provincial Legal Office, the said proposed amendments are valid pursuant to Section 468 in relation to Sections 134, 135, 136, 137, 138, 139, 140 and 141 of the Local Government Code. WHEREAS, further, the Committee is of the opinion that before these amendments should take effect, they should first be published and posted as provided by law for the information and guidance of the various sectors that will be affected by the same. DHITCc WHEREAS, during the presentation of the proposed amendments and after discussion and debate, these proposed amendments underwent fine-tuning and further amendments for clarity and due consideration to the taxpayers. Following its introduction in the third and final reading and after the division of the house, this August Body unanimously approves the subject ordinance. In view of the foregoing considerations, therefore, this August Body deems it proper to adopt the amendments to the existing Provincial Revenue Code subject of the report in as much as it is fully convinced of its necessity and timelines. NOW, THEREFORE, on motion of the Honorable Macario N. Napulan, Floor Leader, which was unanimously seconded, BE IT ORDAINED, as it is hereby Ordained, by the Sangguniang Panlalawigan ng Iloilo in session assembled that: ILOILO PROVINCIAL ORDINANCE NO. 090-11 "AN ORDINANCE AMENDING CERTAIN PROVISIONS OF PROVINCIAL REVENUE CODE OF 2010" SECTION 1. A new section shall be added under CHAPTER II TAX ON TRANSFER OF REAL PROPERTY OWNERSHIP, to be read as follows: Section 11. Surcharge and Penalties for late payment . Failure to pay the tax within the period of sixty (60) days as herein provided shall be subject to a surcharge of Twenty Five Percent (25%) and an interest of Two (2%) per month from the date it is due including surcharges until it is paid, but in no case shall the total interest on the unpaid amount or portion thereof exceed thirty six (36) months. SECTION 2. Two additional sections shall be added under CHAPTER III TAX ON BUSINESS OF PRINTING AND PUBLICATION, to be read as follows: Section 15. Time, Place and Manner of payment . The tax shall be paid to the Provincial Treasurer or his duly authorized deputies within the first twenty (20) days of January of every year. The tax imposed in this Chapter shall be due and payable in quarterly installments to the Provincial Treasurer within the first twenty (20) days following each quarter. In the case of a newly started business, the tax shall be paid before the business starts to operate. Section 16. Surcharge and Penalties for late payment . Failure to pay the tax on the date due shall be subject to a surcharge of Twenty Five Percent (25%) plus interest of Two Percent (2%) per month from the date it is due including surcharges until it is paid, but in no case shall the total interest on the unpaid amount or portion thereof exceed thirty-six (36) months. SECTION 3. A new paragraph shall be added in the existing Section 99 under CHAPTER VIII ANNUAL FIXED TAX FOR DELIVERY TRUCK OR VAN OF MANUFACTURERS OR PRODUCERS, WHOLESALERS OF, DEALERS OR RETAILERS IN CERTAIN PRODUCTS/SERVICES, which shall become Section 101, to be read as follows: Section 101. Failure or refusal to pay the herein imposed tax shall be sufficient ground/cause for the Provincial or Municipal Treasurer's Office as the case may be, through the duly deputized agents or representatives to apprehend, take into custody, detain or impound the subject vehicle. SECTION 4. An additional phrase shall be added to the existing Section 113 under CHAPTER IX: REAL PROPERTY TAX, which shall become Section 115, to be read as follows: Section 115. Tax discount for advance and prompt payment . ....If payment is made in full for the forthcoming years, the taxpayer should be granted a discount not exceeding twenty (20%) of the annual tax due, provided payment should be made on or before December 31 of the current year . SECTION 5. A similar rate as that of the Department of Public Works and Highways for the Bidder's Tender and the Infrastructure and Consultancy Fees under CHAPTER XIV: BIDS AND AWARDS COMMITTEE FEES shall be adopted and an additional item shall be added as: A. Bidder's Tender Cost of Goods Rate P200,000.00 and below P300.00 200,001.00-500,000.00 500.00 500,001.00-1,000,000.00 1,000.00 1,000,001.00-5,000,000.00 5,000.00 5,000,001.00-20,000,000.00 10,000.00 20,000,001.00-50,000,000.00 20,000.00 50,000,001.00-100,000,000.00 30,000.00 100,000,001.00 and above 40,000.00 B. Infrastructure and Consultancy Cost of Goods Rate P1,000,000.00 and below P1,000.00 1,000,001.00-5,000,000.00 5,000.00 5,000,001.00-20,000,000.00 10,000.00 20,000,001.00-50,000,000.00 20,000.00 50,000,001.00-100,000,000.00 30,000.00 100,000,001.00 and above 40,000.00 C. Accreditation of Suppliers P1,000.00 SECTION 6. An amendment on the existing Section 159 under CHAPTER XV: RENTALS FOR REAL PROPERTY, shall be adopted which shall become a new Section 161, to be read as follows: cEaSHC Section 161. Lease of Real Property . A) Real property owned by the Province may be leased for consideration, and for such terms and conditions, as may be approved by the Sangguniang Panlalawigan. B) Real properties of the Province acquired through various auctions sales may be leased at a rate as may be determined by the members of the Appraisal Committee, composed of the Provincial Treasurer, Provincial Assessor and the Provincial Engineer, subject to the approval of the Sangguniang Panlalawigan . SECTION 7. Separability Clause . If, for any reason, any provision of this Ordinance should be held unconstitutional or invalid, other parts or provisions hereof, which are not affected thereby, shall continue to be in full force and effect. SECTION 8. Effectivity . This Ordinance shall take effect after its publication in full for three (3) consecutive days in a newspaper of local circulation and posting in at least two (2) conspicuous and publicly accessible places, whichever occurs later, pursuant to Article 277 of the Implementing Rules and Regulations of RA 7160, otherwise known as the Local Government Code of 1991. RESOLVED FURTHER, to furnish copies of this Resolution, the Governor, Hon. Arthur D. Defensor, Sr.,Vice Governor, Hon. Oscar "Richard" S. Garin, Jr.,all SP Members, all Municipal Mayors, All Municipal/City Treasurers and Assessors, the Provincial Legal Office, Provincial Treasurer, Provincial Bids and Awards Committee through Provincial Administrator Raul Banias, and the Provincial Auditor, all of the Province of Iloilo, for their information and guidance. APPROVED. I HEREBY CERTIFY to the correctness of the above-quoted Ordinance. (SGD.) LORENZO T. TUBOLA Secretary to the SP CONCURRED BY: (SGD.) MACARIO N. NAPULAN Floor Leader ATTESTED BY: (SGD.) OSCAR "Richard" S. GARIN, JR. Presiding Officer APPROVED BY: (SGD.) ARTHUR D. DEFENSOR, SR. Governor