Business owners in Mandaue City will have two years to adjust to the scheduled 10 percent increase in business taxes instead of facing the full hike in a single year.
The Mandaue City Council approved an ordinance implementing a staggered increase: five percent will take effect in 2026, and the remaining five percent in 2027.
Councilor Joel Seno, chair of the Committee on Appropriations, Budget and Finance, said the measure aims to ease the burden on business owners affected by recent calamities.
“In light of recent events that impacted not only Mandaue City but other parts of Cebu Province, we decided to give our businessmen some relief,” Seno said.
The Local Government Code allows LGUs to raise business taxes by up to 10 percent every five years. Seno noted the city opted for gradual implementation considering the prevailing economic conditions.
Mayor Thadeo Jovito “Jonkie” Ouano recommended the staggered approach through the Local Finance Committee, emphasizing that business owners should not face additional burdens during recovery periods.
“When calamities strike, everyone is affected. The city recognizes this situation and avoids placing further burden on the people,” Seno said.
Seno added that the staggered increase reflects the city’s commitment to being business-friendly while continuing to attract investors.
Atty. August Lizer Malate, head of the Business Permits and Licensing Office (BPLO), explained that the 10 percent increase applies to the tax rate itself, not total payments.
For example, a one percent tax on gross sales would rise to 1.1 percent.
He added that actual tax payments depend on a business’s declared gross sales.
Businesses with decreased sales due to calamities or other factors may submit supporting documents, such as BIR reports, audited financial statements, or income tax returns, to reflect lower payments.
“Proof must show that their sales really went down for that year,” Malate said.
Malate emphasized that business taxes are a crucial source of revenue for funding public services and city projects. He also clarified that the BPLO will implement the ordinance in full compliance with the Local Government Code.
“Taxes and fees collected are used to fund projects and services that benefit the community,” he said, stressing that while easing the burden on business owners is important, compliance with tax policies remains necessary. (VCL)
