DAVAO CITY — The 10% increase in business taxes that took effect this year could hurt micro, small and medium enterprises (MSMEs), said business leaders as they called on the city government to implement more projects to boost economic growth.

The Davao City Chamber of Commerce and Industry, Inc. (DCCCII) said the increase in local taxes needs to be “reasonable” so as not to discourage MSMEs.

“We need to help them graduate (into bigger enterprises) as they are the ones that need assistance,” said DCCCII President Arturo M. Milan.

Mr. Milan earlier called on the local government to help the MSME sector, which he said needs support from both the public sector and their organization as part of the campaign for inclusive growth.

The Mindanao Business Council, through Chair Vicente T. Lao, said while it would be better if there is a status quo in the tax rates, an adjustment is welcome if there is a corresponding development plan.

“If we are getting the infrastructure and social services that the city government is providing, I think it is only fair that the business sector should also contribute to the government in its effort to serve the people,” said Mr. Lao.

Banana growers, on the other hand, protested over the increase, saying this will impact on consumers.

“This will definitely add burden to the consumers who will be indirectly hit. It can possibly cause a slowdown,” said Stephen A. Antig, Pilipino Banana Growers and Exporters Association (PBGEA) executive director.

The group has been calling on the government to craft policies to ensure the sustainability of the industry, which has been threatened not only by competition from other countries in the international market, but also by the initiatives of some groups and local government units.

PBGEA has been calling for the removal of certain local taxes, such as the environment levy imposed on the banana sector by Davao City and Compostela Valley province.

The Davao City government amended its revenue tax code last year, the first since 12 years ago, including the 10% adjustment in tax rates.

In a press statement released last week, Erwin P. Alparaque, Davao City Tax Research and Action Team head, said the new policy increases revenue obligations even of small businesses like eateries with an annual income of less than P50,000.

“The amendment of our tax code is for the city to generate more funds to support the projects and services that the city offers,” said Mr. Alparaque. — Carmelito Q. Francisco

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