Tuesday, February 03, 2015

Entrepreneurial Farmer by Ambrosio R. Villorente

Local Revenue Code Of Kalibo And You

“An ordinance Enacting Local Revenue Code of Kalibo, Aklan” is an ordinance approved by the Sangguniang Bayan of Kalibo and Mayor William S. Lachica. This is now under review by the Sangguniang Panlalawigan of Aklan.

The Code is of 150 pages computerized on long bond paper, double space. According to the members of the SB Kalibo who approved the Code, the said Code shall govern the levy, assessment, and collection of taxes, fees, charges, and other impositions within the jurisdiction of Kalibo, Aklan, Philippines.

Did the SB Kalibo follow the process in the enactment of the said Code like the prior publication of it as mandated by the Local Government Code and its Implementing Rules and regulations? If not, then the said Code maybe invalidated. I did not read any publication of the said Code before its approval as an ordinance.
Is the said Code voted by necessary and required number of votes? If the answer to this question is negative, the said Code maybe declared null and void by proper and concerned authorities.

Going over the provisions of the said Code, I found the tax impositions, fees and charges are highly excessive, and confiscatory. The Code has also several riders.

Business Taxes

Business Taxes are imposed on gross sales on manufacturers, assemblers, repackers, processors, brewers, distillers of liquors, producers of rice and corn among others. This provision will discourage businessmen to conduct business in Kalibo. The farmers will be discouraged to grow and produce food crops due to the excessive taxes. The Code will impose taxes on the investment as it will levy taxes on gross income. It should be for the best of the business, the community and the people if taxes are only levied on net income.

Late Payment

Oh why? For failure of the tax payer to pay the prescribed amount of tax, a surcharge of 25 percent of the original amount of tax due will be collected. Wow! LGU Kalibo seems to have lent a sum of money to a tax payer, failure to pay the amortization on time, it will collect 25 percent surcharge on the original amount or on the remaining balance of the collectible tax. This is too huge than the penalty the banks and even pawnshops ask their borrowers to pay for overdue loans.

For unpaid taxes, LGU Kalibo will impose two (2) percent interest per month or 24 percent per annum. This interest is too high and unreasonable.

These surcharges and penalties the Revenue Code of Kalibo imposes on tax payers will discourage businessmen to continue conducting business in Kalibo. They might be motivated to transfer their businesses to adjacent municipalities.

A good example of this are the States of New Jersey and New York. New York collects sales taxes while New Jersey does not. Since New Jersey is just across the river or separated by a river, many people from New York go to New Jersey to do their shopping. 

As a result, New Jersey increased its sales tax collections while New York sales tax collection is diminishing. 

As to the operation of motorized tricycles in Kalibo, the franchise owner will pay P1,075 for franchise fee. This is renewable every three (3) years. Moreover, the operator will also pay P500 for mayor’s permit annually.

SB Kalibo has identified and listed 94 possible violations with its corresponding penalties motorized tricycle operators and drivers may possibly commit.

These are violations regarding motor vehicle registration, franchise and permit; violations concerning license; concerning plates and stickers; relative to motor vehicle parts, accessories and markings; relative to for hire motor vehicle parts, accessories; fraud and falsities; parking violations and others. The penalties for its violation range from P200 to P2,500.

Who will implement traffic laws and ordinance so that travel in Kalibo is highly safe, pleasant and enjoyable? These are highly beneficial to both pedestrians, and drivers. But who will implement these traffic rules and regulations and collect penalties from operators and drivers found and proven to have violated this revenue code? (Additional analysis on the provisions on this Revenue Code of Kalibo, Aklan will be continued in the future issues.) /MP

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