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Tax exemption for Japan ODA projects OK’d

AN ORDINANCE exempting Japanese Official Development Assistance (ODA) funded projects from local business tax was passed on third reading in the 20th City Council’s regular session on May 14, a lawmaker said Tuesday.

During the Aprubado sa Konseho on June 11, Councilor Myrna Dalodo-Ortiz said section 2 of the ordinance, which sanctions zero percent tax but only on projects proven to be funded by Japan ODA.

This includes contractors and other independent contractors under Ordinance 02991-17 as amended by Ordinance No. 0147-19.

For one to be granted privilege, the applicant has to submit to the City Treasurer a confirmation from the Ambassador of Japan of the inclusion of the project in the current and updated list of Japan-ODA-funded projects.

Proof of payment of tax obligations prior to the enactment of the ordinance is also required.

“The burden of proof lies upon the applicant to prove the actual basis of its claim for application under this Ordinance. In case of doubt, this Ordinance shall be strictly construed against the applicant,” Section 3 reads.

Applicants granted the zero tax are required to submit an annual report consisting of detailed progress and financial status of the project to the City Treasurer.

The chair of the committee on finance, ways, means, and appropriations said the ordinance relieves Japanese contractors including Japan International Cooperation Agency (JICA) from local business taxes to the tune of P73 million.

Ortiz stressed the ordinance looks into the “cost-benefit” by considering if the fund for the city’s Bypass Road costing P13 billion is borrowed, the interest rate will be close to a billion pesos.

She added granting the P70 million worth tax-free to Japan-ODA is more beneficial than borrowing the P13 billion for the project which will end the city in debt of P937.8 million in three years.

“Granting the P70 million is better if we consider the cost of money, that’s why we grant this through legislation,” the councilor said.

She said as much as possible the city government does not want to accumulate debt anew, following the clearing of P5 billion debt sometime in 2019.

The construction of the city’s Bypass Project, and coastal Bypass Road Project is among the projects funded by JICA.


Photo: Vice Mayor J. Melchor Quitain Facebook


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