City Told to Obtain Certified List of Taxpayers with Obligation

The Cebu City Government is advised to have a certified list of taxpayers, particularly real property owners, showing the amount due and collectible every year as one way to improve the revenue collections.

Cebu City Auditor Cymbeline Celia Chiong Uy told Mayor Michael Rama that the absence of a certified list of taxpayers showing the concerned taxpayers’ obligations to the city is a clear violation of Section 20, Volume 1 of the New Government Accounting System (NGAS) Manual for local government units.

The state auditor explained that all local government units (LGU) should maintain records of their receivables because it can be very useful in the preparation of the Annual Budget that will be submitted to the legislative bodies not later than October 16 of every year.

According to Uy, the law is clear: “Real property tax receivables/special education tax receivables shall be established at the beginning of the year based on the Real Property Tax Account Register/Taxpayer’s Index Card.”

It was further stated that it is the duty of the treasurer to furnish the chief accountant of a duly certified list showing the name of taxpayers and the amount due and collectible for the year.

City Accountant Diwa Cuevas explained that she did not set up records of receivables since her office failed to receive the certified list of taxpayers with amount due and collectible for the year.  Only the collections of the real property taxes and for the special education fund (SEF) were recorded and were credited to Account 588 and 599, respectively.

Acting City Treasurer Emma Villarete said they will comply with the COA’s instruction, saying “We will just extract it from the system based on the tax assessment made by the City Assessor’s Office.”

The personnel from the executive department are now busy preparing the supporting documents for the proposed annual budget for 2014 so they could endorse it to the City Council before the deadline. The documents would include the estimated revenue collections from the real properties or lands, buildings and machineries.

COA mentioned that in 2012, the city’s real property tax collection was P340.1 million while P250.3 million was the collection from the Special Education Fund (SEF), but Villarete said the actual real property tax collections of the city last year was P640 million.

The real property owners are required to pay two percent for the real property tax and one percent for the SEF. Of the two percent real property tax collections, the 70 percent of it will go to the city’s coffers while the 30 percent represents the barangays’ share, and the SEF will be spent for school-related projects.

The state auditors said the receivables from the real property taxes should be recorded in the books of accounts and not mere income estimates but the actual receivables from said taxes as one way to avoid overdraft of expenses.