THE DEPARTMENT of Finance (DoF) told a Senate technical working group on Tuesday that outdated real property market values could cost provinces as much as P7.4 billion and cities up to P23.077 billion in terms of foregone revenues.
“Based on our estimates, kung naga-update regularly ‘yung local government unit sana meron silang additional na P7.4 billion,” DoF Bureau of Local Government Finance (BLGF) Acting Deputy Executive Director Jose Arnold M. Tan said.
He said that such foregone revenues could have funded construction of 551 public markets and 771 kilometers of road, among others. In addition, it was reported an estimated P23.077 billion revenues have also been foregone in 51 metropolitan areas and highly urbanized cities.
Mr. Tan was speaking before the technical working group of the joint Senate panel on Ways and Means and Local Government tackling the reform on real property valuation and assessment.
The proposed reform is embodied in House Bill No. 8453, which was approved on final reading in November last year, and Senate Bill No. 44.
He explained that in the present system, there is no single agency responsible for ensuring that valuations are regularly updated. There are also no sanctions imposed for noncompliance with the Local Government Code (LGC) requirement that these values are updated every three years. Elected local officials serve three-year terms.
“Ang provisions ng LGC ang ginagamit ng mga (are used by) local assessors (to) sa pag-update ng schedule of market values (SMV). Although required ang LGU (local government units) to update their schedule every three years, walang (there is no) sanction (for non-compliance with the law),” Mr. Tan noted.
“The only sanction is they will not be getting that much revenues, they will not be able to provide the necessary services, ‘yun ang consequence sa LGU.”
SB 44, authored by Senator Panfilo M. Lacson, mandates the BLGF to develop, adopt and maintain valuation standards and ensure LGU compliance through sanctions.
While it backed the measure, the Chamber of Real Estate and Builders Association (CREBA) called for a limit on how much LGUs can hike tax rates.
“We fully support this bill. Our concern is centered on the experience of land owners now, that is the amount of taxes that assessors of local governments impose,” CREBA National President Charlie v. Gorayeb told the panel.
“… [L]et’s peg a cap on how much increase…,” he said, describing some LGUs as “loose cannon” in imposing taxes deemed “confiscatory.” — Charmaine A. Tadalan