Wednesday, December 2, 2020

The ‘Isko’ phenomenon


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The Merriam-Webster dictionary defines “phenomenon” as “a rare or significant fact or event.” Lately, the new Mayor of Manila, Francisco “Isko” Domagoso, has been making waves, what with his refreshing take on what a mayor’s obligations should be. The maverick mayor is literally cleaning up the streets of Manila and is trying to bring back the grandeur of the nation’s capital. A phenomenon, no doubt, as it is rare that we see this level of commitment coming from a Philippine public official.

And it is this level of commitment that we need to hit the headlines and go viral in social media. Other mayors have followed suit and can now be seen posting videos of similar sidewalk clearing operations on YouTube. It is satisfying to see all these cleaning and clearing operations, but what we’d like to see is a mayor’s caliber with other areas of city governance. It is no secret that former Manila Mayor Joseph Estrada left Manila with a P4.4-billion deficit. What is Mayor Domagoso’s plan of action to address this issue?

On July 31, Mayor Domagoso signed Manila City Ordinance 8566, declaring a tax amnesty program for the City of Manila. With the ordinance, Manila residents with unpaid business taxes, real property taxes, regulatory fees and other service charges may have a chance to settle their tax obligations without being burdened by the accompanying penalties brought about by non/late payment of taxes. Upon full payment of the principal amount of the basic taxes, the ordinance has waived the imposition of penalties, charges and fines. The tax amnesty may be availed from Aug. 1 to Dec. 20, 2019 according to the ordinance.

As to how the tax amnesty program will help address the city’s budget deficit, the ordinance notes that a tax amnesty is the “effective response” to encourage taxpayers to have a clean slate by settling, once and for all, their tax obligations with the city. The ordinance draws symbolism from the city’s current clean-up operations, by giving delinquent taxpayers a “fresh clean start.” Speaking to merchants who have forgone the payment of delinquent taxes for fear of reprisal, the mayor noted, “This is the time to finally correct your books.”

Apart from encouraging the payment of taxes, the ordinance, according to Mayor Domagoso, will hopefully curb the current corrupt practices of city hall officials. “This is the opportunity to correct our mistakes. We are correcting everything, so there will be no discretion for any inspector to check your books and accounts. All you have to do is pay what is due to the city,” the mayor said.

Manila’s ordinance comes in the wake of similar tax amnesty programs under Republic Act 11213, the “Tax Amnesty Act of 2019,” particularly the “Estate Tax Amnesty” and the “Tax Amnesty on Delinquencies.” Will the “Isko phenomenon” spur other local government units to issue similar local tax ordinances beneficial to their constituents? Let us hope so.

Ron Arriesgado is a tax lawyer, a transfer pricing specialist and is a partner at the LMA Law Offices in Makati City. He has managed and resolved taxation issues of local and multinational entities; resolved various tax assessment cases issued by the Bureau of Internal Revenue; and provided clients with the proper tax strategies to cancel or substantially lower tax assessments, among others.



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