A waste of government revenue opportunity

Reading this article gives an idea that as much as PHP20 billion is not being collected in real estate taxes in many cities and provinces in the country. When you consider the value of taxes in supporting the proper delivery of public services, one wonders why. Its unfortunate, the national government has no control in compelling local governments to update the values used in collecting these taxes. And to think, various local governments keep on introducing new forms of taxes for its residents to pay (in my case, I now have to pay a garbage tax for my home in Manila), the basic property taxes like these are being ignored. Let’s see how we can improve the situation.

From BusinessWorld Philippines

March 11, 2015

Cities with outdated property valuations targeted by Tax Watch

THE FINANCE department’s weekly Tax Watch advertisement yesterday put local governments in the spotlight again, this time flagging cities with outdated schedules of market values (SMVs) for real property that result in billions of pesos in foregone revenue.

“Cities miss up to P20.3 billion in real property taxes when they use outdated schedules of market values and are not aggressive in tax collection,” the advertisement said.

“About P15.9 billion of which are foregone in 51 metropolitan areas and highly urbanized cities alone,” it added.

The estimates were computed based on the incremental revenues to be generated from local government units with outdated SMVs, the Finance department said.

Despite the boom in the construction, housing and real estate industries, the Finance department said a total of 112 of the 144 cities in the Philippines use outdated SMVs contrary to the Local Government Code.

Malabon and Navotas have the most outdated SMVs, with taxes pegged at 1993 prices or more than 20 years overdue, followed by Gapan, San Fernando, La Union, Tanauan, and Valencia (1994 or 19 years overdue); Tuguegarao (18 years); Baguio, General Santos, Mabalacat, and Quezon City (17 years); and Makati, Oroquieta, Parañaque, Pasig, Pateros, San Juan and Toledo (16 years).

Guihulngan and Tanjay’s SMVs were outdated by 14 years, followed by Calbayog, Danao, Kidapawan, Malolos, Mandaue, Ormoc, Tabaco and Tacloban (13 years); Mandaluyong (12 years); Bogo, Carcar, Lucena, Marikina, Naga City in Cebu, Pasay (11 years); Alaminos, Bais, Cebu City, Las Piñas, Mati, Olongapo, Roxas City, San Carlos in Pangasinan and Tayabas (10 years).

A total of 68 other cities have outdated property valuations below 10 years.

Meanwhile, 30 cities have updated schedules of market values, the ad noted.

The Finance department said P20.3 billion can fund 2,929 low-cost resettlement projects, 298 landfills, 451 transport terminals and 1,015 satellite health centers.

“If fully enforced and properly administered, real property tax is a progressive and stable source of revenues to be shared to municipalities, barangay and local school boards,” the advertisement said.

“Pay your real property tax. Make your local governments accountable. Sustainable local finance begins with correct valuation and efficient tax collection,” it added.

Last week, the Finance Department tagged 52 provinces with outdated property valuations, resulting in foregone revenues of up to P9.4 billion. — Imee Charlee C. Delavin

Article location : http://www.bworldonline.com/content.php?section=Economy&title=Cities with outdated property valuations targeted by Tax Watch&id=104170

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