Big companies such as SM Prime Holdings and Megaworld Corp. as well as other trade organizations in Quezon City are backing the city government’s move to adjust the fair market value of lands and properties in the city.
During a public consultation at City Hall on Thursday, representatives of the city-based business establishments were generally supportive of Proposed Ordinance No. 20CC-141 but others asked that tax incentives be given to businesses with small capital.
The draft legislation, which Mayor Herbert Bautista is pushing, sets the revised schedule of the fair market values of land and basic construction cost for buildings in the city as mandated by Section 219 of Republic Act 7160 or the 1991 Local Government Code.
Fe Wong, tax officer of SM Prime Holdings, operator of SM shopping malls, said the company was not objecting to the proposed legislation.
“Yes we support it. We will submit our position paper later,” she said.
This was echoed by real estate developer Megaworld Corp., whose manager for its corporate advisory and compliance division, John Joseph Sy said, “We are definitely supporting this measure. We have always been supportive of the city government’s endeavors as long as it is beneficial to us and to the interests of our clientele, tenants, and buyers.”
Megaworld developed and owns the 17-hectare Eastwood City, a commercial and residential property in Quezon City’s Bagumbayan area.
As a company, Megaworld was “always looking at public-private participation” in supporting city government initiatives, Sy said.
On the other end, trade organizations such as the Association of Filipino Franchisers, Inc. (AFFI) also gave the assurance that the group will work with the city government on the draft tax measure.
“Yes, we support it. As much as we want to oppose it and we would appreciate having no increase, the city government explained that it has been a long time since the last increase (in fair market values of property),” said Rafael Canare, AFFI executive director.
The 200-member AFFI is an organization of small-and medium scale business franchisees; 80 percent of its members operate their franchises in Quezon City, mostly as tenants in malls, Canare said.
He added that AFFI was hoping the city government would provide tax incentives to small businesses that would bear the brunt of the expected increase in leasing fees to be imposed by property owners such as malls and commercial buildings affected by the adjustment of real property tax.
“These businesses have very small capital so if the mall, for example, will increase rent, the cost of leasing property will also increase. Definitely, they will have much smaller income. This added cost will be passed on to us. But of course, business should continue. We want to continue doing business with them,” Canare said.
The Office of the City Assessor and the Committee on Ways and Means of the Sangguniang Panglungsod have been holding public consultations to discuss the proposed tax measure with the affected property owners, as mandated by Section 187 of the Local Government Code.
So far, the city council has conducted 23 public consultations in different barangay (villages) in the six districts of Quezon City. These were attended by thousands of property owners and residents.
Earlier, Bautista asked the Sanggunian’s Committee on Ways and Means to comply with the Commission on Audit (COA) and Department of Finance (DOF) recommendation to update the city’s outdated land and property values.
COA, through State Auditor Rose Dela Cruz, earlier sent letters to the city government urging the revision of the city’s outdated land and property values, the non-updating of which she said had “invariably affected the real property administration system.”
It said Quezon City last revised its fair market values on November 29, 1995 through Ordinance No. SP-348.
In addition, the Department of Finance also issued Joint Memorandum Circular 2010-01 enjoining all local government units to implement Section 219 (General Revision of Assessments and Property Classification) of RA 7160 concerning the revision of property assessments and classification every three years.