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Tax on idle lands pushed

Vol. XXII, No. 108 [ BusinessWorld Online ]

Wednesday, December 24, 2008 | MANILA, PHILIPPINES


THE NATIONAL Land Use Committee (NLUC), led by the National Economic and Development Authority (NEDA), will push idle land taxation as a long-term measure to address rice self-sufficiency, a statement yesterday read.


The imposition of idle land tax is mandated by Republic Act 7160, or the Local Government Code (LGC), and by RA 8435, or the Agricultural and Fisheries Modernization Act (AFMA), to enable local government units (LGUs) to push landowners to put their agricultural lands to productive use.


"But this is not being implemented by municipalities," NLUC chairman and NEDA Deputy Director General Augusto B. Santos said in a phone interview yesterday.


Mr. Santos said that, besides helping to address rice self-sufficiency, "the proceeds could also be used by the municipalities for other development purposes," he said further.


Besides NEDA, NLUC members consist of representatives from 10 other line departments, as well as from the Housing and Urban Development Coordinating Council.


Members of the committee agreed on this thrust upon clarification that there is no inconsistency between the two laws with regard to idle land taxation. Specifically, the LGC considers idle land tax as a revenue-raising measure, while the AFMA treats it as a penalty for wasting the potential of agricultural lands.


Long-term measures


In both laws, the idle land tax is collected primarily by the municipal treasurer. However, the municipality does not retain the proceeds, since these accrue to the general fund of the province, in the case of the LGC-mandated idle land tax, and to the national treasury, in the case of AFMA.


To encourage municipalities to collect the said tax, the NLUC also agreed to push for the amendment of Section 273 of the LGC and Rule 11.3 of AFMA’s implementing rules and regulations to provide for municipalities’ share from the proceeds of idle land tax. The NLUC will also advise the leagues of Provinces and Municipalities to discuss possible tax sharing schemes as an interim measure.


Since last April, NLUC has been discussing long-term policy measures that could increase rice production. Foremost among these is the move to declare all rice lands as protected areas, as provided under Administrative Orders 226 and 226-A issued last May and July, respectively.


Another long-term solution the committee identified was monitoring by an interagency technical working group headed by the Housing and Land Use Regulatory Board of LGUs’ reclassification of agricultural lands. Land reclassification is the first step towards land use conversion, which in turn works against increased rice production. — with a report from LDD

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