Makati open to revenue-sharing arrangement with Taguig



To end the tug-of-war over upscale Fort Bonifacio, the Makati city government on Thursday suggested a revenue-sharing arrangement with its rival Taguig.

Makati Mayor Jejomar Erwin Binay Jr. said the arrangement will be supervised by a special administrative body that will govern the Bonifacio Global City in Fort Bonifacio.

The body will be made up of representatives from Makati and Taguig.

“We want to show that this is not about revenues. We simply wanted to get back what is rightfully and historically ours,” Binay said.

“Makati wants to help the people of Taguig and we feel that a revenue-sharing scheme would be the best approach,” he added.

Binay said Makati has been contesting Taguig’s claim over the Global City, which is part of the Inner Fort area, even before the area became a business and commercial center.

“There were hardly any establishments in BGC in 1993 but we were already contesting Taguig’s claim,” he said.

He earlier assured Fort Bonifacio residents and businesses that Makati will not be collecting taxes this year, easing worries of those who paid their taxes in Taguig.

He also said there will be no tax increases amid efforts to unify the tax rates of Makati and Fort Bonifacio, which is currently using Taguig’s rate.

“Now that we are able to take hold of the Bonifacio Global City, we are also contemplating that we could now lower rates because there’s a lot of money to be collected, more than enough,” he said.

Binay pointed out that Makati survived despite not being able to collect taxes from Bonifacio Global City for the past 20 years.

“If we are lower then we’ll retain our rates. If we are higher, we’ll bring it down to Taguig’s rates,” he said.

He refuted claims that Taguig has “relatively lower tax rates.”

“Considering that Makati is the country’s premier financial center, our current tax rates are competitive, even lower in certain fields,” Binay said.

As an example, he said the assessment level used by Makati in computing real property tax (RPT) for commercial lots is 40 percent, while Taguig’s is 50 percent.

The assessed value of a commercial property worth P24 million would be P9.6 million in Makati and P12 million in Taguig, Binay pointed out.

Although Makati’s 3 percent property tax rate is higher than Taguig’s 2.5 percent, the lower assessed value of a commercial property in Makati results in lower RPT due per annum: P288,000 for Makati and P300,000 for Taguig in the case cited.

Makati has also a lower assessment level for residential lots – 12 percent compared to Taguig’s 20 percent, and subsequently charges a lower RPT than Taguig even though its tax rate of 2.5 percent is higher than Taguig’s two percent.

The assessment level is fixed by a city ordinance.

The Court of Appeals Sixth Division has ruled on the long-running territorial dispute between the two cities, upholding Makati’s jurisdiction over the more than 729-hectare portion of Fort Bonifacio, which is home to Bonifacio Global City.

The court ordered Taguig “to immediately cease and desist from exercising jurisdiction within the disputed area and return the same to Makati,” after noting that Taguig failed to present evidence to support its claim.

In 1993 Taguig filed a case before the Pasig Regional Trial Court to prevent Makati from claiming jurisdiction over Fort Bonifacio. In July 1994 the court ruled in Taguig’s favor.

Since its revised Revenue Code took effect in 2006, the city government of Makati has not increased its taxes, yet its revenue collections from business and real property taxes continued to rise annually and it has remained deficit-free for the past 26 years.




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