By Zinnia B. Dela Peña (The Philippine
Star) | Updated February 26, 2015 - 12:00am
MANILA, Philippines - The Department
of Finance is lobbying for the passage of
a legislative measure that seeks to establish a fair and uniform real
property valuation system and raise as much as P17.6 billion in additional tax
annually.
Finance Secretary Cesar Purisima said
the passage of the Valuation Reform Bill is expected to provide an additional
P5.88 billion to P17.6 billion in local property tax yearly.
The Valuation Reform Bill is seen to
improve the valuation system in the country to ensure that real property
contributes fairly to local and national revenues, Purisima added.
Purisima noted that while the country
witnessed a tremendous real estate boom in the past several years, majority of
the provinces and cities continued to use an outdated real estate valuation
system in collecting their real property
tax, thereby failing to capitalize on soaring real estate prices.
“Even the collection efficiency is so
dismal that the 10-year national average is only 57 percent and has never gone
beyond 70 percent of aggregate LGU
collectibles,” Purisima said.
Aside from this, Purisima noted that
idle land tax is also not widely used even in the most urban LGUs. “If LGUs
could only update their SMVs properly and optimize collections, improve the tax
records and database, enforce collections legally, the estimated annual
incremental revenue is P10.8 billion to P12.03 billion – and municipalities and
barangays will also get their fair share in real property tax,” Purisima said.
“The basic education sector also
stands to gain from this reform as they will get about half of these revenues
from the Special Education Fund,” the Finance chief added.
Purisima likewise noted that revenue
performance of locally sourced revenues of LGUs as a percentage of GDP had
declined from 0.91 percent in 2009 to a preliminary ratio of 0.80 percent in
2012. The year-on-year growth of local
revenues also continued to slide from 11 percent in 2010 to one percent in
2012.
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