Countdown

Day 1 of the New Year and I guess I need to start the countdown to the end of my 3rd term in the City Council.

2009 would be my last full year in the City Council. My 9-year, 3-term stint at the local legsilative body ends on June 30, 2010.

There are still plenty of work to do and this year would indeed be a busy one. After taking it slow the past year to help me recover from my stomach ailment, I must now take extra effort to work harder and try to complete my legislative agenda.

January 6 is the resumption of the City Council session and I have already lined up three measures, namely, the extension up to January 31 the period for the renewal of business licenses, which is set by law during the first 20 days of the month; preparations for the Chinese New Year and inauguration of the second arch at Chinatown; and release of the balance of the city government Internal Revenue Allotment (IRA) as a result of the Supreme Court decision declaring the conversion of 16 towns into new cities last year as illegal.

On the last issue, the city is supposed to receive P2.055 billion in IRA shares last year. But because of the creation of new cities, this was reduced to P1.861 billion. Instead of an increase of P263 million from the previous year, the city got only an additional P69 million, thereby losing about P194 million.

With the High Court ruling, the city rightfully deserves to receive the full share of the IRA. We need this money to help pump prime the local economy and provide more social services as we face the effects of the global recession in our city.

Thank you to the Christmas cheers from Franklyn Ong of Pasajero Motors, Johnny Martinez of Mantex and DCWD.

Advertisements

Well done grilling

No, I am no expert in BBQ.

And certainly I did not expect to land in the front page of the Mindanao Daily Mirror yesterday over grilling.

Well, I did not grill anyone at the City Council last Tuesday. I actually asked three simple questions from the representative of the World Bank – International Finance Corporation (IFC) regarding its study that showed “it is difficult to start a business in the city.”

Its study claimed that it takes 42 days to obtain a business permit in Davao City. Repeat 42 days!

And so, I asked the WB-IFC rep how long it would take her to travel from her office to City Hall, about 3 kilometers way. She was a bit surprised by my question. She replied 15 minutes.

Then, I inquired how long it would take her for her lunch break that day. One hour she answered.

Finally, I asked her if she were to report these activities to her HQ in Washington DC, would she report the trip and the lunch separately as 1 Day each?

At first she was hesitant to answer. She finally conceded to report it as 15 minutes and 1 hour respectively and on the same day.

I rest my case.

Her admission to these fact were clear indication to me that their study had a fatal and fundamental error. In their time-motion study of obtaining business permits, they quantify the activities by the day and not by the realistic average time such as for instance, in minutes or hours. We all know that time is gold to business people.

Thus, their study claimed that it would take 1 Day to get a residence certificate from the City Treasurer, and another 1 Day to obtain a business permit application form, and so on. I raised this objection because in reality, one could secure these two things in a few minutes or at most 1 Hour.

In obtaining a zoning certificate, their study listed a total of 9 days to get one! Our zoning official was present at the City Council session at the time and so I moved for her participation. Architect Luisa Tuquib refuted the WB-IFC study. She said the certificate could be obtained in a few minutes. She said if she were out of the office, the same could be obtained in half a day or at most 1 Day.

The second objection I raised was in the manner of listing each and every step in obtaining a business permit. Many of these steps could be done simultaneously or in parallel with other steps. Yet, in the WB-IFC study, it listed each step separately and on separate days. OMG, haven’t they heard of multi-tasking!

Hence, in the case, for instance, in obtaining a residence certificate from the City Treasurer and obtaining a business permit application form at the Business Bureau, the study listed the two activities as 1 Day each and on 2 separate Days. This is a total exaggeration!

The City Treasurer’s Office and the Business Bureau are neighbors – yes side by side – at the ground floor of the City Council Building. Therefore, obtaining these two requirements could be done in a matter of minutes or at most an Hour or so, and could be done in the same Day. Surely, not 2 Days as claimed by the WB-IFC.

Veteran Councilor Vic Advincula summed up our long debate on the issue. He raised the collective concern of the members of the City Council over the apparent “dis-information” when he concluded that the study was “grossly wrong!”

On a final note, there are about 34,000 registered businesses in the city. If it were true that it takes 42 Days to secure a business permit in the city, we would have seen a revolt in town a long time ago!

Yes, there may be faults and loopholes in our system and these are being addressed. But this is not comparable to the folly of the WB-IFC methodology!

Incidentally, the grilling was well done!

6:41 a.m.

BIR wants LGUs as its Gestapo

The Bureau of Internal Revenue or BIR missed its tax collection target last year by P53.8 billion. It failed in its goal across the board – value-added tax (VAT) short by P38.187 billion; income tax by P9.715 billion; percentage tax by P4.098 billion; and excise tax by P3.915 billion.

Congress is now investigating this biggest tax collection failure in the country’s history.

As a kneejerk reaction, BIR has issued a new Memorandum dated January 8, 2008 mandating local government units or LGUs not to issue or renew business and professional permits without first submitting a number of BIR requirements.

This memo was advertised in leading newspapers only today; the period for business permit renewals ended yesterday.

First, the Memo is clearly late. Renewal of business permits has commenced on the first working day of the month. And I got a report from Atty. Jhopee Agustin of the Business Bureau that the business licensing went smoothly.

Second, requiring applicants to comply with the many BIR requirements such as copies of the Income Tax Returns, monthly and quarterly Value-added Tax Returns, etc. smacks of red tape to say the least. Putting more obstacles to professional and business applicants is contrary to our policy to limit bureaucratic requirements and hasten the processing of such permits.

Third, this BIR policy would only encourage businesses not to seek permits and to go underground, thereby negating our efforts to register all businesses in the city or in the country for that matter.

I believe that the BIR should squarely admit the blame for its own failures. It should not pass on the burden of collecting taxes to the LGUs.

In a sense, the BIR wants LGUs to play Gestapo to apply state terror on professionals and businesses applying for their permits.

This is most deplorable and highly objectionable.

I am certain that LGUs would want to help the BIR in its tax revenue efforts. But certainly, not this bullying way.

Almost 99 percent of about 40,000 business registrants in the city are micro and small and medium enterprises or MSMEs. They may seem to be lowly businesses but they contribute highly to jobs generation and taxation. They are the asset that makes our city grow. They are our development partners.

I believe that we should treat them fairly and not be burdened with so many regulations and requirements.

In missing its collection target last year, BIR has clearly shown its folly and bias.

The biggest failure in last year’s missed collection goal was the Large Taxpayers Group of the BIR. This group handles taxes for the Top 1,000 corporations. This group failed to collect P38.8 billion from the big businesses. From its target of P469.7 billion, this group collected only P430.9. This shortfall represents 70 percent of the total missed target of the BIR.

Who heads this special group? No less than the BIR Commissioner herself, Lilian Hefti.

Here is my advise to her. Run after tax evaders! Collect from the rich and big taxpayers first, before pounching on the small fries! And do your job first before ordering LGUs how to do theirs!

(9:12 a.m.)