The approval of the 2017 Revenue Code of Davao City will pave a way for a new taxation scheme that will require multinational companies doing business in the city to pay taxes.
“Included in our recommendations regarding the manner of imposing taxes for multinational corporations and other businesses without branch, office or sales office in Davao City,” Human Resources Management Office (HRMO) Chief Erwin Alparaque said during yesterday’s iSpeak Forum at City Hall.
Alparaque, who is also head of the Tax Research and Action Team (TRACT) formed by Mayor Sara Duterte, said there are multinational companies that are declaring their gross receipts from income derived in the city to their principal offices in Makati or Manila.
He said this dilemma was already addressed as they already have a separate provision in the revenue code regarding the situs of tax or the place of taxation.
“Even if you don’t have a branch office in city, as long as you do business, and derive income here, you are subject to payment of taxes here and covered by the Davao City tax ordinance and revenue code,” he said.
Alparaque said some multinationals are already paying their taxes for income derived from the city, to the local government. However, he said, others still insist on paying their taxes in Makati where their main offices are located.
The proposed 2017 Revenue Code for Davao City is expected to be approved within the year after the required public hearings have been conducted as provided by law.
Copies of the proposed amendment have been posted in conspicuous areas in the city including the City Hall and the Sangguniang Panlungsod.
Councilor Danilo Dayanghirang said public hearings will be conducted in all districts to make sure Dabawenyos are informed about the amendments.
The TRACT was formed to review the existing revenue code as it has not been amended for the last 12 years. The Local Government Code authorizes the local government units to adjust tax rates by up to ten percent once every five years. Lovely A. Carillo