THE approved P350 million budget for 2005 for the City of Dagupan is attainable without increasing its tax rates.

The claim was made jointly in a press statement   by   both Councilor Michael Fernandez and City Administrator Raffy Baraan to belie claims in the media that the city is planning to increase its tax rates to cover its debt service for its P282 million loan obligations.

“We only need to generate enough revenue in terms of increase in tax collections and not increase in tax rates,” Baraan said.

Fernandez, chair of the committees on appropriations and ways and means, on the other hand said that the P350 million budget is attainable as long as the city government adheres to the provisions of the tax ordinance and the implementation of effective and efficient tax collection.

However, Fernandez suggested that the city government enact a Local Revenue Code to generate more income for Dagupan City.

 “The passage of a local revenue code is necessary because it is an indispensable component of quality   fiscal management,” according to the councilor.

He clarified that he was misquoted by one news weekly (presumably the PUNCH story last week -Ed.) on the issue that the City needs to hike taxes anew to pay loans.

 “I didn’t mean that the update of taxes is for loan payment but rather, the efficient balance of payment. In this way, Dagupan will not be dependent on the Internal Revenue Allotment (IRA) and we can address all the needs of various sectors with adequate funds,” Fernandez declared while adding that all local government units should learn to be self-sustaining in addressing the needs of the constituents.

The reported budget deficit issue was the subject of the exclusive PUNCH interview with Fernandez two weeks ago. He cited the need to increase tax rates and improve collections to help the city achieve a balanced budget in 2005 and in subsequent years.

The 2005 budget has allocated for the first time P70 million for the city’s debt service.  

But even as the councilor claimed he was misquoted about increasing tax rates in the city, he cited the experience of Quezon City under the leadership of  Mayor Feliciano Belmonte, Jr.

Quezon City, according to  Fernandez, was experiencing financial difficulty but upon Belmonte’s assumption, he updated tax measures and conducted effective assessment and collection of taxes.

 “We should study the benefits of the local revenue code because this is applicable to Dagupan,” the councilor stressed.

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