Makati suspends tax increase for next 3 years

MANILA, Philippines - The Makati city government on Tuesday announced that it has temporarily suspended tax increase for the next three years in a bid to help enterprises and other businesses in the country's financial capital overcome the global financial crisis. "We realize that this is not the time for the city government to further burden our business partners. We believe that the city government's revenues are sufficient at the moment to sustain the level of services we provide for our constituents," Makati Mayor Jejomar Binay said in a statement. The proposed cap on taxes in the city was raised by business leaders during a crisis conference at the Makati City Hall last month. In turn, the tax cap in Makati's real property and other taxes is expected to draw up partnerships to generate jobs for its residents. The city government organized the conference to assess the impact of the crisis on the city and its enterprises, and the job security of residents. "The consensus is that while 2009 will be a difficult year for all of us, there is a ray of sunshine in some sectors. While some industries will encounter soft or flat growth, some industries will grow and even expand," he said. Likewise, Binay said that some of the business sectors – namely banking and finance, property development and business process outsourcing - see growth opportunities emerging in the next few months. "But overall, we share the assessment that business confidence needs to be rekindled, the investment base needs to be expanded, small businesses need to be nurtured, and more importantly, jobs must be protected and created," he said. Records showed that in 2008, the city government had a budget of P6.7 billion. This year, city officials are projecting an income of P7.1 billion. At the same time, Binay said companies that will participate in a program to train and hire qualified residents would receive incentives in the form of discounts in their permit taxes. "The priority of government at this crucial time should be to allow some businesses to keep operating, which enables workers to keep their jobs, until the economy recovers and the affected industries can rehire more workers again. Until the economic storm has passed, it is government's responsibility to help both enterprises and workers," he said. Aside from providing relief from new taxes, Binay encouraged enterprises to work hand-in-hand with the city government to map out a plan to provide employment for qualified residents on a long term basis. "Participation in this plan is on a voluntary basis, but those who do sign up will be eligible to certain incentives," he said. Aside from the fiscal incentives, Binay said the city-run University of Makati would provide training for employable skills at no cost to the hiring company. At present, the university has existing partnerships with companies that assure employment for qualified graduates. - GMANews.TV