NEW ORDINANCE. Manila Mayor Isko Moreno hopes to encourage businesses to set up shop in Manila. File photo by Lito Borras/Rappler

MANILA, Philippines – Manila City Mayor Isko Moreno on Thursday, August 22, signed an ordinance lowering the real property tax in the capital by 20% starting in 2020, the first tranche of the three-year incremental 40% tax reduction aimed at providing "a more progressive and equitable revenue system" for taxpayers.

The reduction of taxes is part of Moreno's push to encourage more businesses to set up shop in the capital, ideally leading to increased revenue collections for the local government.

Moreno signed Ordinance No. 8567 at the Bulwagang Katipunan of the Manila City Hall. It grants an initial 20% reduction starting next year, followed by an additional 10% reduction each at the end of 2021 and 2022 to complete the 40% drop in real property taxes by the time Moreno completes his term. The substantial tax reduction was a campaign promise of Moreno.

The ordinance takes effect on January 1, 2020.

"There is a need to adopt a more progressive and equitable revenue system to help our taxpayers from the detrimental effects of [an] economic downturn," the ordinance read.

The City Treasurer's Office and the Department of Assessment were given 5 days from the ordinance's approval to issue the necessary rules and guidelines. – Rappler.com