SM Group convinces Davao council to review tax code
-BusinessWorld

Davao City- This city’s legislative council has decided to review the new Davao City tax code, approved in November last year, following a request made by representatives of retail giant SM Prime Holdings.

The Issue revolves around a provision in the tax code’s section 69 that pegs different tax rates for retailers and traders.

Last week, a resolution was introduced by Councilor Bonifacio Militar to review the provision after the SM Group reportedly formalized its petition through a written request. Council members met with officials of the retail firm in early June to discuss the matter and Mr. Militar said the council would formally discuss the revision on Wednesday.

Local representatives of the SM group could not be reached over the weekend for comment on the issue but a city hall source underscored it involves a significantly higher tax imposed on the retailer, where the shopping mall operator is classified.

The city official added that the 2005 ordinance has separate rates for wholesalers and retailers unlike in the past. ‘I can’t quote the exact figures but the retailer pays a higher tax compared with the wholesaler under the revised rates, he said. Mr. Militar admitted to local media over the weekend that this is the first time a retailer’s tax was collected by the city government.

City hall officials noted SM’s local operation is a major economic contributor in the city not only in terms of taxes paid directly to the local government but also its positive impact on local businesses and consumers as well.

The company’s Davao shopping mall, located at the Ecoland district near the overland transport terminal, also contributes significantly in attracting a big number of visitors from nearby provinces, especially during weekends.

The city government, meanwhile, had also noted the increased tax rates imposed on businesses and property owners would be channeled back not only in improving social service delivery to residents but enhancing the local investment environment as well.