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and Property Assessments (2010-01) and Idle Land Taxation (2010-02)
LATEST NEWS
Lower real property tax collection target pushed
By Carmelito Q. Francisco and Sarwell Q. Meniano
Businessworld, April 25, 2012

TACLOBAN CITY — A lower real property tax collection target for this year has been proposed for Eastern Visayas due to difficulty in collecting taxes, an official said.

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Maguindanao off tax collection goal by half, says COA
By Leila B. Salaverria
Philippine Daily Inquirer, April 10, 2012

Maguindanao missed its tax collection goal for 2011 by more than half, and it needs to intensify tax collection efforts this year to get more funds for its operations, according to the Commission on Audit (COA).

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Taguig City gov´t not keen on real property tax hikes
By Nathaniel R. Melican
Philippine Daily Inquirer, March 19, 2012

Amid the rising prices of oil and other commodities, residents and companies doing business in Taguig City can breathe a sigh of relief as the taxes they pay for their property in the city will not increase anytime soon.

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Laguna municipal treasurers meet to discuss real property tax performance
By Alan C. Ortillano
Philippine Information Agency, March 14, 2012

SANTA CRUZ, Laguna, March 14 (PIA) — The Provincial Treasurer´s Office, (PTO) headed by Evelyn A. de Guzman invited the municipal treasurers (MTs) of Cavinti, Famy, Kalayaan, Lumban, Mabitac, Majayjay, Nagcarlan, Sta. Maria, and Victoria to discuss the municipalities´ performance in real property tax (RPT) collection at the Provincial Treasurer´s Office (PTO), March 6.

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Tax hike angers Tarlac property owners
By Froilan E. Magtoto
Manila Times, February 15, 2012

TARLAC CITY -- Mayor Ace Manalang explained the need to increase real property taxes in the city during a press briefing here the other day amid owners´ complaints of the increase in their real estate taxes ranging from 100 percent to 400 percent this year.

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Quezon offers projects as incentives to hike realty tax take
By Delfin T. Mallari Jr.
Inquirer Southern Luzon, February 6, 2012

As part of its efforts to increase realty tax collection, the provincial government has offered millions of pesos worth of projects, vehicles, classrooms and school equipment to local government units that meet revenue targets and to property owners who pay correct taxes.

See more...


´Delays in tax mapping to affect revenue targets´
By Doris C. Bongcac
Cebu Daily News, February 4, 2012

THE Cebu city government may not be able to meet its revenue projections this year due to delays in tax mapping activities, said City Assessor Eustaquio Cesa. His office needs to hire 90 job-order employees, mostly engineering and geodetic graduates to help in the tax mapping.

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Assessor: Lower budget means lower income
By Rene U. Borromeo
The Freeman, February 4, 2012

CEBU, Philippines – Cebu City Acting Assessor Eustaquio Cesa is afraid the city may not be able to collect the P5.2 billion revenues to support this year´s approved annual budget because they could not conduct an intensified tax mapping and revalidation of real property units.

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Land values in Tacloban set to rise
By Lean Arinto
Business World, January 10, 2011

TACLOBAN CITY -- Landowners and businesses in this city face higher real property taxes as the city government has approved an ordinance adjusting market values by 25% to generate additional revenues.

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Tacloban, North Cotobato town hike land tax
By Joey A. Gabieta
Inquirer Visayas, Monday, December 26, 2011

TACLOBAN CITY — This city is expected to increase its earnings from real property taxes because the city government has increased by 25 percent the land valuation for residential and commercial lots here.

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LGUs taking a step too far
BIZLINKS by Rey Gamboa
December 19, 2011, Philippine Star

Last week, I expressed what I liked most about the new structure and workings of local governments in the Philippines. Today, I would like to express my concerns about current local governance after more than two decades when the Local Government Code was enacted.

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More provinces, cities update land valuation schedules
BLGF Press Release
December 9, 2011

FIVE provinces and 10 cities in the country have already updated their schedule of market values (SMVs) for real property tax assessments whereas 12 provinces and 26 cities will follow suit beginning next year, in response to a joint memorandum circular issued last year by the Finance and Local Government departments.

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Burden or necessity?
A Law Each Day (Keeps Trouble Away) by Jose C. Sison
Philippine Star, December 5, 2011

Our national budget for next year is a whopping P1.8 trillion. And, as we all know, said amount will mainly come from the enforced proportional contributions of the citizens and assessments on their property, if any, levied by the lawmaking body of the State. These enforced contributions and assessments are commonly known as taxes which all citizens must pay for the continued existence of the government and for all public needs and purposes. They are collected through the State´s exercise of the power of taxation.

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Iloilo City OKs 100% imposition of realty tax by 2012
By Wenna A. Berondo
The Freeman, November 26, 2011

ILOILO CITY, Philippines - Despite opposition from various business groups, the Iloilo City Council the other day unanimously approved in third and final reading the tax ordinance implementing 100 percent of the 2006 schedule of market values on real property tax.

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Bacolod cited as most efficient in property tax collection
By Chrysee G. Samillano
Business World, November 23, 2011

BACOLOD CITY - A report by the Bureau of Local Government Finance (BLGF) cited Bacolod City as the most efficient local government unit in Western Visayas region in terms of real property tax collection last year.

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Cebu mayors air concern over proposed real property tax hike
By Mars W. Mosqueda
Manila Bulletin, November 14, 2011

CEBU, Philippines — The League of Municipalities of the Philippines (LMP)–Cebu Chapter is appealing to the Cebu Provincial Board (PB) to set aside its proposed ordinance increasing real property taxes.

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San Pablo folk slam 200% hike in taxes
By Maricar Cinco
Inquirer Southern Luzon, November 9, 2011

A proposal by the San Pablo City government to increase real property taxes by an average of 200 percent next year drew protests from taxpayers in the city, who also questioned the timing of the planned tax increase.

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Iloilo business community urges city gov´t for friendlier tax collection
By Tara Yap
Manila Bulletin, November 3, 2011

ILOILO CITY, Iloilo, Philippines — The business community in Iloilo is appealing to the city government for the implementation of a "friendlier" real property tax collection.

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COA urges LGUs to use latest fair market value
By Gregg M. Rubio
The Freeman, November 1, 2011

CEBU, Philippines - The Commission on Audit has asked local government units to implement the latest schedule of fair market values in realty tax collections instead of the old one.

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Parañaque readies higher property tax
By Antonio Siegfrid O. Alegado
Business World, October 25, 2011

HOMEOWNERS and businesses in the City of Parañaque face higher real property taxes starting next year after the local government updated fair market values for land and improvements, an ordinance approved on Oct. 13 and published in a newspaper on Monday showed.

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City braces for full 2006 RPT market value
By Lydia C. Pendon
SunStar Iloilo, October 20, 2011

THE Iloilo City Council will decide on October 26 whether to approve the ordinance calling for the full implementation of the real property tax (RPT) based on the 2006 tax ordinance starting 2012.

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Tambunting cite flaws in ordinance
By Jean Fernando
Manila Bulletin, October 17, 2011

MANILA, Philippines — Parañaque City Vice-Mayor Gus Tambunting temporarily relinquished his post as presiding officer of the Sangguniang Panglungsod and spoke on the procedural defects of City Ordinance No. 31, entitled Ordinance Adopting the Revised Schedule of Fair Market Values of Real Property in the City of Parañaque.

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The Local Government Code at 20: Politics still messing up fiscal autonomy
By Likha Cuevas-Miel
October 9, 2011, Interaksyon.com

MANILA, Philippines - Politics is slowly cutting off the lifeblood of local governments and for a cash-strapped nation this is a matter of development and stagnation.

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Latest News Full Content


Lower real property tax collection target pushed
By Carmelito Q. Francisco and Sarwell Q. Meniano
Businessworld, April 25, 2012

TACLOBAN CITY — A lower real property tax collection target for this year has been proposed for Eastern Visayas due to difficulty in collecting taxes, an official said.

Based on the total assessed valuation submitted by provincial assessors, the region is capable of generating P1 billion RPT (real property tax). However, we sought for consideration since that is not attainable, George Roma, Bureau of Local Government Finance (BLGF) regional director, told BusinessWorld.

The request to lower the target to P907 million has been conveyed to the main office in Manila, he said.

Although lower than the P1-billion goal, the proposed revised target is still higher than the actual RPT collection of P788.6 million last year.

The P1-billion target is attainable, Mr. Roma said, if local governments will send out early the notices of assessment to property owners and taxpayers pay their taxes religiously.

He also reminded local officials to update the local revenue code every five years and revise the schedule of market values once every three years.

The BLGF has intensified the conduct of revenue and assessment audit to evaluate and update local tax ordinances. It has also been conducting capability building seminars in the last two years to improve collection performance at the local level.

We are building the capability of local collectors on how to collect revenue from taxable properties and how to deal with unsettled accounts. The latest training was in Northern Samar and we will continue to do that in the whole region, Mr. Roma said.

Real property tax collection in the region last year reached P788.6 million, higher than the P629.8-million revised target and 60% higher than the 2010 figures.

Mr. Roma cited in particular the good performance of Ormoc City, which collected P329.5 million; Tacloban City with P123.1 million; and Leyte province with P165.8 million.

The local government units posted collection performance rates of 242%, 152% and 110%, respectively. Other areas, however, registered lower collections and poor collection efficiency.

Last year, Ormoc City was able to collect real property tax from California Energy. Tacloban City implemented the tax condonation program while Leyte province held a public auction, said Mr. Roma.

Taxes generated out of these activities contributed a lot to the overall performance, he added.

In Davao City, meanwhile, the local government is seeking higher taxes and other fees to improve the delivery of services, an official said.

Erwin P. Alparaque, assistant city administrator, said that based on a proposal pending at the city council, the tax rates and fees will be increased by as much as 100%.

With the rate adjustments, the city government would be able to provide a better quality service to its residents,said Mr. Alparaque.

Should the proposed changes to the local revenue code be approved, he said, collections will total more than half a billion pesos, broken down into P120.28 in taxes and P385 million in fees. Mr. Roma said higher taxes and fees have been proposed in line with the Local Government Code (LGC).

The local revenue code has not been amended for the past seven years. Under the LGC, local ordinances relating to taxes and fees could be amended after five years.

The business sector through the Davao City Chamber of Commerce and Industry, however, has opposed higher taxes as it will be a disincentive to investors, especially the small businesses who have yet to recoup losses during the 2008 financial crisis.

Based on data from the Department of Budget and Management, the city´s total revenue this year is estimated to reach P4.1 billion, of which about two-thirds will come from the internal revenue allotment (IRA), or the LGU share from national tax collections.

Aside from business taxes, other sources of revenues for the city are clearance and certification fees, garbage fees, inspection fees and library fees, receipts from cemetery operations and rent from the Davao City Recreation Center.

Maguindanao off tax collection goal by half, says COA
By Leila B. Salaverria
Philippine Daily Inquirer, April 10, 2012

Maguindanao missed its tax collection goal for 2011 by more than half, and it needs to intensify tax collection efforts this year to get more funds for its operations, according to the Commission on Audit (COA).

The COA said, however, that Maguindanao is on the right track in developing projects for reducing poverty, building infrastructure, and improving education and health services.

In its 2011 report for the province, the COA said Maguindanao managed to collect only 39.81 percent of its tax collection goal of P5.515 million, or just P2.195 million.

Maguidanao, the COA said, needs to improve its collection of real property taxes from municipalities. The provincial government had planned to collect P4 million in real property taxes in 2011, but only managed to collect a little more than P900,000, the COA said.

Maguindanao also failed to meet its collection goals for business and property taxes, and tax on sand and gravel, but it overshot its goals for franchise tax and tax on delivery trucks and vans.

Still, the COA said, Maguindanao´s overall tax collection was not enough.

The state audit agency said Maguindanao´s treasurer should step up collection efforts so that the provincial government could get additional funds for its operations.

The COA recommended that the provincial treasurer strictly monitor the municipalities´ collection of realty taxes and "compel them to remit the share of the province."

But the COA also found something to praise in Maguindanao, one of the poorest provinces¬† and the site of the worst political violence in the country´s history, the massacre of 57 people in Ampatuan town on November 23, 2009.

The COA said the provincial government had taken "bolder steps" toward reducing poverty, developing infrastructure, and improving education and health services by carrying out various projects. The COA said it hoped the projects would improve the image of the province and the lives of its people.

One of the projects that the audit agency praised is a carabao dispersal program for the poorest of poor tenants. Under the program, 96 carabaos have been given to tenants, who also receive technical support until the carabaos produce female offspring, which will be given to other beneficiaries.

Also gaining COA approval is an oil palm and rubber seedlings distribution program, where seedlings are given to local governments to provide residents with a means to get out of poverty.

Maguindanao also introduced monthly medical assistance to inmates, as well as deployed a mobile hospital for the general public. The mobile hospital carries basic medical, dental, and surgical equipment, and an x-ray machine.

The provincial government has also launched an assistance program for poor students, and is pressing the development of infrastructure as an economic booster.

The COA recommended that Maguindanao continue the projects and expand their coverage. It added that the projects are important to the development of Maguindanao´s economy.

Taguig City gov´t not keen on real property tax hikes
By Nathaniel R. Melica
Philippine Daily Inquirer, March 19, 2012

Amid the rising prices of oil and other commodities, residents and companies doing business in Taguig City can breathe a sigh of relief as the taxes they pay for their property in the city will not increase anytime soon.

Aurelio Paulo Bartolome, councilor for the second district of Taguig, said the city council would maintain the fair market values of land in the city, which is among the factors considered when computing for real property taxes.

"We have just updated that some years ago so it may take a while before we make another adjustment," he explained.

Bartolome said that the fair market values, especially of commercial land in Taguig City, were "either of the same rate or lower" compared with other commercial areas in other cities.

"We want to retain the lower tax rates here in the city as an incentive to encourage businessmen to set up shop or transfer their business here," he said.

The fair market values of land were last updated in 2008 under Ordinance 113 as the city noted the rapid development of property, especially in the Fort Bonifacio area.

Fair market values for residential and commercial land in the area shot up by 300 to 800 percent under the ordinance, but for much of the city, the council decided to retain 2001 market values.

For example, a square meter of residential land on McKinley Hills is valued at P8,000, compared to P2,500 in 2001.

Meanwhile, commercial land values at the City Center, NCBD, Bonifacio South, E-Square, Crescent Park West, and Bonifacio North were raised to P20,000 per square meter in 2008 from the P6,000 per square meter in 2001.

Residential land values for much of the city remained at P3,000 per square meter at the highest.


Laguna municipal treasurers meet to discuss real property tax performance
By Alan C. Ortillano
Philippine Information Agency, March 14, 2012

SANTA CRUZ, Laguna, March 14 (PIA) --The Provincial Treasurer´s Office, (PTO) headed by Evelyn A. de Guzman invited the municipal treasurers (MTs) of Cavinti, Famy, Kalayaan, Lumban, Mabitac, Majayjay, Nagcarlan, Sta. Maria, and Victoria to discuss the municipalities´ performance in real property tax (RPT) collection at the Provincial Treasurer´s Office (PTO), March 6.

De Guzman considers the municipalities as the RPT collecting arm of the PTO and their performance largely affects the collection of the entire province. She stressed that it is really important to push the small municipalities more to achieve their target RPT collection.

She requested for inputs from the municipal treasurers and tackled the problems that they usually encounter in RPT collection. Suggestions were made to address the said problems and came up with ways to increase the municipalities' collection efficiency.

Likewise, PT de Guzman appealed to the treasurers to coordinate with their municipal assessors, especially in organizing records, and advised them to always update their files. She also instructed them to continuously send notices to delinquent tax payers.

Lastly, she encouraged the treasurers to double their efforts to meet, or hopefully exceed, their targets in RPT collection for this year. She also stressed that PTO is very much willing to extend their help in providing assistance for the information dissemination program of their respective municipalities.

Also present during the meeting were Acting Assistant Provincial Treasurer Marieta M. Coral and Local Treasury Operations Officer II Alene T. Bedonio.


Tax hike angers Tarlac property owners
By Lean Arinto
Business World, January 10, 2011

TARLAC CITY: Mayor Ace Manalang explained the need to increase real property taxes in the city during a press briefing here the other day amid owners´ complaints of the increase in their real estate taxes ranging from 100 percent to 400 percent this year.

"I have a heavy heart when executing such measure, we don´t want our taxpayers to bear such a burden but it would be more burdensome if we cannot give them the basic services that they deserve, more so the poor who need these services most from the city government," the mayor explained.

As this developed city administrator Louie Juico, said the increase is due for implementation of a long overdue ordinance approved in 2004 during the past administration.

According to the ordinance, Juico said, then Sangguniang Panglunsod headed by Vice Mayor Teresita Cabal, approved the schedule of a new fair market value that would be the basis of a new computation of the real property tax.

"The mayor has just act as a chief executive not a politician when implementing such ordinance," Juico said.

Manalang said that, with the new ruling of the Supreme Court which approved the additional 16 new chartered cities all over the country, at least P70 million have been sliced from the city government Internal Revenue Allotment (IRA) that resulted in the city treasury´s cash deficiency.

With the adjustment made to the fair market value of the real state in the city, the treasury office expects to collect at least P58 million this year, Juico said.

Juico also said that no amnesty will be allowed this time because some taxpayers have evaded to pay their obligation on time relying on the said amnesty.


Quezon offers projects as incentives to hike realty tax take
By Delfin T. Mallari Jr.
Inquirer Southern Luzon, February 6, 2012

As part of its efforts to increase realty tax collection, the provincial government has offered millions of pesos worth of projects, vehicles, classrooms and school equipment to local government units that meet revenue targets and to property owners who pay correct taxes.

Governor David Suarez said the tax collection program, dubbed "Damayan at Serbisyong Publiko ng Bawat Pisong Buwis Mo," aimed to collect about P1.8 billion in real property tax at the village, municipal and provincial levels. It started on Jan. 9 and will end on October 30.

"If this amount will be collected, the delivery of basic services on health, agriculture, education and countryside development will be implemented for the poorest families in the province," he said on Friday.

Suarez lamented that the provincial government was able to collect only some P400 million in realty tax before he assumed office in 2010. Under his administration, the collection rose by 130 percent last year, he said.

He said the tax assessment systems between Capitol and its LGUs must be corrected. Towns and barangays must assess property values differently from the provincial government, he added.

Suarez clarified that the tax campaign was not an offshoot of the failed collection of P6.1 billion in revenue from the Pagbilao geothermal power plant. Executive Order No. 27, issued by President Benigno Aquino III last year, stopped the provincial government from collecting the unpaid realty taxes from the plant´s operator, Team Energy.

The governor urged school officials to join the campaign by encouraging parents of students and community members to pay real property tax as the participating public schools of a winning LGU could also get prizes.

Only towns and villages that would meet 60 percent of their annual tax collection goal may join the contest, Suarez said.

Prizes at the municipal level will be P3 million worth of projects as first prize; P2 million, second prize; and P1 million, third prize. The winning barangays will get as much as P150,000 in projects.

The participating schools can win a classroom worth P500,000 as first prize; P300,000 worth of desks and tables, second prize; and P200,000 worth of instructional materials, third prize.

The lucky taxpayers can win a brand new van and 10 tricycles that will be raffled off.


´Delays in tax mapping to affect revenue targets´
By Doris C. Bongcac
Cebu Daily News, February 4, 2012

THE Cebu city government may not be able to meet its revenue projections this year due to delays in tax mapping activities, said City Assessor Eustaquio Cesa.

His office needs to hire 90 job-order employees, mostly engineering and geodetic graduates to help in the tax mapping.

Hiring these employees as well as training and acquisition of vehicles and equipment for their office would required a budget of P25 million to P30 million.

However, the City Council reduced his proposed budget to only P8 million.

With this, the assessor´s office would have to make do with existing personnel to do the tax mapping, said Cesa.

Five teams with three personnel each go out on field three times a week.

"They cannot be on field the whole week because we also have office work to attend to," said assistant city assessor Liezel Gonzaga.

Cesa said that with delays in their tax mapping, they could not realize their revenue projections.

Tax mapping data will be used by the City Treasurer´s Office to determine if the classification of the real property coincides with its actual use.


Assessor: Lower budget means lower income
By Rene U. Borromeo
The Freeman, February 4, 2012

CEBU, Philippines - Cebu City Acting Assessor Eustaquio Cesa is afraid the city may not be able to collect the P5.2 billion revenues to support this year´s approved annual budget because they could not conduct an intensified tax mapping and revalidation of real property units.

Cesa and Assistant Assessor Liezel Gonzaga said they suggested for the hiring of at least 90 job order employees to revalidate the 218,000 real property units in the city to increase revenues, but the City Council approved P8 million out of their P24 million proposal.

Gonzaga said the City would be spending P9 million for the whole year´s salaries of the 90 job order employees, including the cost of equipment like laptops, aside from the cost to train them for their tasks.

The assessor´s office only has 12 personnel assigned to conduct tax mapping and revalidation of land, buildings and machineries to determine whether the real property units (RPU) are still within the classification based on their tax documents.

Cesa and Gonzaga explained that there are several houses and residential buildings classified as residential in City Hall records although these were converted for commercial purposes.

It was proven that the tax mapping and revalidation of RPUs helped increase the assessed value of properties, this is why the Assessor´s Office was able to raise the tax value of several reassessed RPUs from P16,314,396 to P82,040,482.

The new tax assessment of real properties in barangay Kamputhaw and Capitol Site, and parts of barangay Apas, Lahug, Guadalupe, Sta. Cruz and Cogon-Central can already be implemented this year.

Cesa said his personnel also started a reassessment of tax values of the land, buildings and machineries in some parts of barangay Mabolo and Kasambagan.

Meanwhile, during the reassessment and revalidation there were 410 RPUs that were discovered underclared, although the Office of the Building Officials (OBO) had already issued occupancy permits to all of them.

It prompted Cesa to request OBO Acting head Josefa Ylanan not to issue occupancy permits to newly constructed buildings without tax declaration from the City Assessor´s Office.


Land values in Tacloban set to rise
By Lean Arinto
Business World, January 10, 2011

TACLOBAN CITY — Landowners and businesses in this city face higher real property taxes as the city government has approved an ordinance adjusting market values by 25% to generate additional revenues.

The ordinance on the revised schedule of market values, approved on Dec. 14, 2011 but signed by Vice-Mayor Jose Arvin A. Antoni only on Jan. 4, 2012, will take effect in 2013.

This will be the first adjustment since 1999, when the market values were last increased.

City assessor Carlos E. Cordero said the city government stands to collect an additional P8 million with the implementation of the new values.

"Our projected collection is very low compared to our original projection of P32 million had the city council approved the recommended 100% increase," Mr. Cordero said. The city government recommended a 100% increase but the city council only approved a 25% increase.

"The present land valuation for residential and commercial properties ranges from P110 to P1,200 per square meter," Mr. Cordero said. There are more than 62,000 real property owners in this city.

The vice-mayor said market values have not been adjusted since 1999 because there was no initiative from the executive department.

"It was only last year that the city assessor proposed to the city mayor Alfred Romualdez for a 100% increase," he said.


Tacloban, North Cotobato town hike land tax
By Joey A. Gabieta
December 26, 2011, Philippine Daily Inquirer

TACLOBAN CITY — This city is expected to increase its earnings from real property taxes because the city government has increased by 25 percent the land valuation for residential and commercial lots here.

City assessor Carlos Cordero said the real property taxes due to the higher property valuation was estimated to reach P8 million.

The present land valuation for residential and commercial properties range from P110 to P1,200 per square meter. Cordero said the last time the city government revised its land valuation was in 1999. The city has 62,000 real property owners, both residential and commercial.

The city council approved an ordinance on Dec. 14 that called for a 25-percent increase in the valuation of real property in the city to be implemented starting January 2012.

Cordero said he had recommended a 100-percent increase in property valuation but the city council only approved a 25-percent increase.

But the council members had noted that imposing a 100-percent increase would not be justifiable, considering the global economic difficulties.

Jack Uy, president of the Tacloban Filipino Chinese Chamber of Commerce and Industry, thanked the city government for not pushing through with its earlier plan.

In an earlier interview, City Mayor Alfred Romualdez said imposing a new tax rate in Tacloban was imminent considering that the city government would lose around P45 million in its internal revenue allotment (IRA) starting next year.

The reduction of Tacloban´s annual IRA of more than P400 million was due to the creation of 16 new cities. Three of the new cities are from Eastern Visayas—Catbalogan, Baybay and Borongan.

In North Cotabato, with the hope of increasing its tax collection before the year ends, Magpet town has offered prizes for good taxpayers, and amnesty for delinquent ones.

Mayor Efren Piñol has called on delinquent taxpayers in Magpet to avail of the town´s tax amnesty.

Municipal Ordinance No. 489 grants delinquent taxpayers a chance to settle their accounts with paying penalties and interests.

"I am appealing to all delinquent taxpayers to avail of the tax amnesty and settle your obligation to our treasury office the soonest possible time," Piñol said.

"Your taxes will return to the community in the form of development projects like roads, bridges and other infrastructure needed to boost business activities," he said.

Piñol said prompt taxpayers have a chance to win prizes as the treasury office announced a raffle promo before the year ends. He said winners would receive a dining set for first prize, sala set for second and dressing cabinet for third prize. Consolation prizes such as electric fan, electric iron, and rice cooker also await the lucky winners.

He said only taxpayers who have been religiously paying their obligations are qualified to join the raffle draw on Dec. 29 at the town´s gymnasium.

Magpet´s treasury office is open even on Saturdays and Sundays to accommodate late taxpayers.
Edwin Fernandez, Inquirer Mindanao


LGUs taking a step too far
BIZLINKS by Rey Gamboa
December 19, 2011, Philippine Star

Last week, I expressed what I liked most about the new structure and workings of local governments in the Philippines. Today, I would like to express my concerns about current local governance after more than two decades when the Local Government Code was enacted.

Perhaps the most glaring exhibition of how too strong our local governments have become is the "abuse" in taxing prerogatives. The Code, for those who are familiar, has allowed local governments to impose taxes, though with limits, on their constituents.

But sometimes, certain initiatives step beyond acceptable bounds. A classic case is the attempt of the City of Manila quite a number of years ago to impose additional taxes on petroleum that passes through their roads. This has been withdrawn after the oil companies brought their concerns before the higher courts.

The city had put forward a reason, i.e., trucks heavy with fuel products passing through local roads were causing damages, and consequently costly repairs. They were also partly to blame for the deteriorating traffic situation in the city.

Oil companies, however, pointed out the folly of such reasoning, one that would open a Pandora´s box leading to other LGUs imposing taxes on the oil tankers passing through their roads.

The biggest argument that oil firms gave, though, was that oil and oil products taxation was already the prerogative of the national government, and that any other taxation would wind up as a double levy, which eventually would be passed on to further burden consumers.

Business friendly

The Code recognizes exclusive areas of jurisdiction when it comes to taxation. With the LGUs´ growing sense of empowerment in recent years, taxation has become a tool that has been used, sometimes with a bit of a heavy hand, to improve the local government´s cash position.

Certain local governments, for example, are now gaining a reputation for excessive taxes, especially those levied on businesses. This, of course, has led the affected entities to seek better operating conditions, i.e., moving their base of operations to cities or municipalities that offer "friendlier" terms.

There are even local governments that "overtax" businesses by imposing just about any kind of taxation, which in the process alienates not only new but also existing companies that do business in the area. There remains still a lot of misunderstanding on how much sales taxes should be imposed on branch operations and main offices.

There is a process now that is being set in place, but the task of defining this is often tedious, costly and time-consuming.

True valuation

Another local revenue source, albeit one that pays off handsomely to some LGUs, is from real estate. Makati and Quezon City are two localities that have been diligently enforcing updated valuation of property as a basis to increasing revenue collections.

Real estate taxation – unlike sales taxes which may be shared with the national government – is without questionable doubt a local tax and goes straight to the LGU´s treasury. The law mandates that LGUs update their schedules of land and real property values every three years.

Many LGUs have now been diligently doing this; but many others have not. Taxes based on updated real estate values are a big help to the local governments in terms of financing their own social development costs, including the maintenance of health clinics and social welfare units.

Such local taxes also help ease the burden on the national government, which we all know has been operating on a deficit for an eternity already.

As the various local government groupings strengthen and mature, we should look forward to more reasonable and logical basis for local taxes.

Businesses generally welcome fair valuation and taxation on real estate, and usually prepare for increases. But when natural calamities – the like of Typhoon Ondoy – happens, they also expect downward adjustments in real estate valuations.

Trivialities

There are other little things that have been bothering me that I presume are also a product of the Code – or the effect of having this Code. One is the noticeable erection of more booms (some wooden bars, others heavy metal with corresponding locks) that prohibit entry into public streets after a certain hour in the night.

Another has to do with tarps that local government officials post at just about any excuse: graduation, Valentines, and of course, the Yuletide. While there are pronounced prohibitions by some LGUs, transgressions are still apparent and sometimes difficult to punish.

It also is a waste of local government funds to see sidewalks and center islands of roads being given facelifts (or even being demolished for new structures) especially when they don´t need a new one. Coincidentally, this often happens there is a change in the local leadership.

Lastly, and I mention this with some uncertainty, is the growing phenomenon of having a spouse or a brother or a sister or a cousin to replace the incumbent when his or her set term expires. This practice, while having its good points, also leaves a lot of opportunity for abuse.

Improvements

Moving on to its third decade, the Code continues to be under study and change. The intention is clear, and there has been indeed a lot of good progress since its passage in 2001. For one, "leagues" or those groupings of local government entities are gaining strength and hopefully wisdom.

The Code has also strengthened people participation, now noticeable with barangay buildings sprouting all over and better choices of barangay officials manning the desks and outposts. But there is still a lot of work that remains to be done.

Champions League´s M. V. Pangilinan Achievement Awards

Champions League (PCCL) 2011 National Collegiate Championship is over and history has been made. The San Sebastian College–Recoletos Golden Stags became the first NCAA team to capture the title in almost a decade.

The feat was accomplished by stopping the dominant collegiate team for the past four years, the four-peat UAAP champion and back-to-back national collegiate champion, the Ateneo Blue Eagles.

There were other outstanding performances recorded during the Final Four championship round. The achievers were given prizes sponsored by Samahang Basketbol ng Pilipina president Manuel V. Pangilinan.

The M. V. Pangilinan Achievement Awards were presented to: Ian Sangalang, SSC-R, Finals Most Valuable Player; Best Coach, Topex Robinson, SSC-R; Best Referee, Romy Mangibin; Mythical team members, Ian Sangalang, Calvin Abueva (SSC-R), Nico Salva (ADMU), Greg Slaughter (ADMU), and Junmar Fajardo (U Cebu).

ABS-CBN Sports, official television coveror of the PCCL games, sponsored the school and team prizes for the top four placers in the national championship.

Visit www.CollegiateChampionsLeague.net for more details and pictures of the Champions League (PCCL) 2011 National Collegiate Championship and members of the mythical team.

Facebook and Twitter

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Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at reydgamboa@yahoo.com. For a compilation of previous articles, visit www.BizlinksPhilippines.net.


More provinces, cities update land valuation schedules
BLGF Press Release
December 9, 2011

FIVE provinces and 10 cities in the country have already updated their schedule of market values (SMVs) for real property tax assessments whereas 12 provinces and 26 cities will follow suit beginning next year, in response to a joint memorandum circular issued last year by the Finance and Local Government departments.

Joint Memorandum Circular 2010-01 issued in October last year enjoined all LGUs to update their SMVs, used by local assessors as basis for appraising properties for real property tax purposes, so as to raise more revenues.

As of November this year, those that already complied were the provinces of Pangasinan, Cavite, Rizal, Romblon and Compostela Valley and the cities of Santiago, Palayan, Antipolo, Tagaytay, Trece Martires, Calapan, Kabankalan, Bayawan, Zamboanga and Davao.

By next year, the provinces of Abra, Laguna, Camarines Norte, Masbate, Sorsogon, Aklan, Capiz, Guimaras, Iloilo, Negros Occidental, South Cotabato and Agusan del Sur, will also implement their new SMVs as well as the cities of Parañaque, Vigan, Laoag, Balanga, Tarlac, Sorsogon, Cavite, Bacolod, Bago, Cadiz, Escalante, Himamaylan, Iloilo, La Carlota, Passi, Roxas, Sagay, San Carlos, Silay, Victoria, Lapu-Lapu, Talisay, Zamboanga, Dapitan, Iligan, and Digos.

"Using an updated SMV as basis in the assessment of real property tax increases LGUs´ capacity to generate revenue from real properties so that they do not depend much on their share of internal revenue allotment (IRA)," said Salvador M. Del Castillo, OIC-Executive Director of the Finance department´s Bureau of Local Government Finance (BLGF).

IRA is the LGUs´ share of revenues from the national government mandated under Section 284 of the Local Government Code with provinces and cities allocated 23% of total IRA each, municipalities with 34% share, and barangays with 20%.

"By making SMV current, real property tax base expands, thus, providing LGUs the opportunity to generate additional income which can be used to finance various projects and improve delivery of basic services," Del Castillo explained.

He noted that under the law, LGUs should conduct a general revision of assessments and property classification every three years in order to reflect true market values of properties. However, this has not been followed by most LGUs.

Data from the BLGF, which has supervision over all LGU treasurers, showed that only 28% of the provinces and 22% of the cities in the country have revised their SMVs as of its last revision in 2008.

To date, a total of 29 provinces and 84 cities have yet to revise their SMVs with base years 2006 or even older, same data showed.

"There are even a number of LGUs whose real property tax collections are based on the SMVs going back to 1996 and even 1993 when it was first implemented," Del Castillo revealed.

"If the LGU uses outdated SMVs in real property tax collection, then properties which have appreciated in value over time would still be taxed based on the lower values, thus taxes imposed are lower than what they should really be," he explained.

"Conversely, properties which have depreciated in value over time would still be taxed based on higher value, penalizing property owners as they are taxed higher than what they should really be taxed with."

As to concerns that revising SMVs will cause property taxes to shoot up, del Castillo said that the assessment levels or tax rates — two other factors being used to compute for real property tax — may be adjusted by the LGUs to cushion the impact of the increases in real property taxes.

"Tax policy options such as phased or staggered implementation and discounts for early tax payments should also be optimized to mitigate potential tax hike," Del Castillo added.

Thus, the DOF calls on LGUs which have not revised their land valuations to do it now.

"This kind of practice has had significant repercussions on local revenue generation over the years and consequently undermines local fiscal autonomy," Del Castillo said.

He noted that the process of regular revision of SMVs is part of the Aquino administration´s effort to increase tax administration efficiency to collect more revenues for the government.

Related links:


Burden or necessity?
A Law Each Day (Keeps Trouble Away) by Jose C. Sison
Philippine Star, December 5, 2011

Our national budget for next year is a whopping P1.8 trillion. And, as we all know, said amount will mainly come from the enforced proportional contributions of the citizens and assessments on their property, if any, levied by the lawmaking body of the State. These enforced contributions and assessments are commonly known as taxes which all citizens must pay for the continued existence of the government and for all public needs and purposes. They are collected through the State´s exercise of the power of taxation.

The rationale therefore behind the State´s power of taxation is that the existence of a government is a necessity, and that the citizens must contribute to its support and sustenance in the expectation that it shall in turn promote the general welfare and provide them the commensurate benefits and protection to life, liberty and property. But it cannot be denied that there are instances when people entertain some doubts on the necessity of the government´s existence or on the reasonableness of the amount of taxes they pay for such existence. In many countries, some people sometimes believe that a government is more of a burden than a necessity.

In our country these doubts and beliefs also exist. The question nagging us for so many years now is whether we really need that huge amount of money, constantly increasing every year, to support the government we have and the kind of services it renders. Over and above the failed expectation of getting the commensurate benefits and services from the government, people here believe that the amount of taxes they pay are already unreasonable simply because a substantial portion of the same are lost to graft and corruption which they have already accepted as a fact of life in government service.

Of course the present government appears to be taking some concrete steps to combat this chronic ailment of every administration. Investigating and prosecuting former President Arroyo for past acts of alleged lying, cheating and stealing may really send a strong message instilling fear on, and deterring every public servant from the lowliest janitor or clerk up to the most powerful officials in the land from committing those acts with impunity. But some of its moves do not augur well towards a successful denouement to this fight.

First of all, the arena of the combat here is no longer in media but in the courtroom. So announcing its legal position and moves or countermoves through press releases and statements only taints its stance with some political color that casts doubt on its sincerity to rid the government of graft and corruption. Such stance also distracts the court and may even influence its decisions or rulings thus resulting in trial by publicity and miscarriage of justice.

Secondly, fighting corruption cannot be done by damaging another institution and co–equal branch of the government essential in the workings of a democracy. More harm will be inflicted on the country and on this administration´s current drive against corruption by attacking and even defying the Judiciary, particularly the Supreme Court (SC) simply because it believes that the latter´s ruling on an issue is "wrong" and that most of the members therein are biased in favor of the adverse party who appointed them. A wrong cannot be corrected or remedied with another wrong.

Up to now therefore, the fight against corruption has not taken off the ground. The current drive of the administration has not apparently deterred those in the government from committing corrupt practices they used to do because they somehow realize that like what happened to the Marcos family and Erap who are now even trying to regain power, nothing much will happen to all these political moves and publicity stunts. Citizens still see and experience the same corrupt practices in the corruption infested offices like the BOC, BIR, DPWH, DOTC, DOH, AFP, and PNP. Hence they cannot erase that sense of unfairness and unreasonableness in the amount of taxes they pay to support the government. They still consider these enforced contributions as heavy burdens.

And this burden becomes heavier because even the local government units most of which are also graft–ridden are now given the power of taxation under the Local Government Code (LGC). While the LGC fixes the limits in the exercise of this taxing power some LGUs still adopt questionable tax measures imposing additional burdens on the taxpayers in their territory.

In Parañaque, the City council passed an ordinance prescribing the schedule of values for lands, buildings and improvement in the city that would result in a 300 percent increase in the land tax rates. In fact the SC has already issued a Temporary Restraining Order (TRO) stopping Parañaque from implementing the ordinance.

In Quezon City, the council likewise passed an ordinance imposing additional taxes on a class of residential lot owners supposedly to provide shelter to informal settlers but which may ultimately result in the confiscation of the lot owners´ land for inability to pay the additional burden.

In San Pablo City, Laguna, an attempt was also made by the City council to adopt an ordinance that would substantially increase the realty tax of the residents. Fortunately, according to one of the residents, Ms. Eva Laurel who emailed me, a big number of vigilant citizens of the City led by its former Mayor Cesar Dizon were able to convince the council to call for a public hearing first. While a hearing was indeed scheduled last November 26, 2011, the notice was not as widely circulated as to meet the legal requirement of a "public" hearing. Upon to now the residents are still trying hard to block the passage of such burdensome ordinance. Indeed they are longing for the return of Ex-Mayor Dizon when they got their taxpayers´ moneys´ worth through genuine and dedicated public service. They missed his kind of politics with principle always aimed at promoting the common good.

And so after all is said and done, the best way to raise revenues in support of the to convince people that they are not being short changed for the taxes they pay; that the existence of government is a necessity rather than a burden.

See BLGF´s response on this article


Iloilo City OKs 100% imposition of realty tax by 2012
By Wenna A. Berondo
The Freeman, November 26, 2011

ILOILO CITY, Philippines — Despite opposition from various business groups, the Iloilo City Council the other day unanimously approved in third and final reading the tax ordinance implementing 100 percent of the 2006 schedule of market values on real property tax.

Councilor Perla Zulueta, proponent of the measure, said the new tax rate will take effect on the first day of 2012, after its publication for three consecutive days in newspaper of general circulation in this city.

Those who have concerns against the full implementation of the tax schedule can raise it up to the Tax Assessment Appeals or Secretary of Justice or file a case in court. "In the meantime, while your complaint is being reviewed, the tax takes effect. If you do not pay, you will suffer penalty," Zulueta said.

Zulueta, also chair of the ways and means committee, said the Council listened to the appeal of real property owners to defer the implementation, but then the financial status of the city must be considered most.

The city government is set to lose P77 million next year because of the cut in its internal revenue allotment by P63 million due to the creation of the new 16 cities. A drop of P14 million in tax revenues is also expected because the city's amusement tax was reduced from 30 percent to 10 percent, she said.

The Council, during the three public hearings, had explained to the real property owners and businessmen the city´s reason for fully implementing the tax. Presently, the city is only collecting 60 percent of the 2006 schedule of market values because the city "is very generous to the business sector," she said.

Zulueta said the city already waived P163 million by not collecting 100 percent of what it was supposed to collect from real property owners in the city.

The last revision of the Schedule of Base Unit Market Values of Lands and Schedule of Base Unit Construction Cost of Buildings and Other Improvements was in 2006, but it was implemented gradually to mitigate the impact on taxpayers.

In 2006 and 2007, the city just implemented 50 percent of the increase and then 60 percent in 2008 up to the present. This year, with the 60 percent implementation of the schedule, the city has a collectible of over P243.7 million.

This could go up to over P303 million when the city starts the 100 percent implementation of the schedule of values.

Citing the possible impact of paying high taxes, real property owners in the city earlier appealed to the city government to impose the real property tax on gradual basis until it is fully implemented.

In a position paper, the business sector asked the city government if it could collect 75 percent in 2012; 90 percent in 2013, and the full implementation of the schedule of market values only in 2014. "We feel that we are highly justified. We´ve been very generous to them already," Zulueta countered.

Councilor Jason Gonzales, vice chair of the ways and means committee, said: "I know it´s difficult for big land owners but it is our duty as citizens and it is the city´s mandate to implement the tax."(FREEMAN)


Bacolod cited as most efficient in property tax collection
By Chrysee G. Samillano
Business World, November 23, 2011

BACOLOD CITY - A report by the Bureau of Local Government Finance (BLGF) cited Bacolod City as the most efficient local government unit in Western Visayas region in terms of real property tax collection last year.

Alice Suela, who was part of a team from BLGF regional office that evaluated Bacolod for the EXCELL Award, said Bacolod collected P424.53 million in real property taxes in 2010.

This was 32.46% better than the target amount of P320.50 million, Ms. Suela said. The report showed that Bacolod was followed by Silay City, which exceeded its target by 30.19% to collect P48.55 million; Victorias City, which collected P89.96 million or around 18% more than its target; Escalante City with a collection of P20.68 million, 9.25% more than its goal; and Iloilo City, which topped its target by 2.54% to collect P387.44 million.

City Treasurer Annabelle Badajos said Bacolod bested 15 others cities in Western Visayas region in terms of collection efficiency in 2010.

Bacolod City Assessor Maphilindo T. Polvora said it was the first time that Bacolod City topped the revenue generation program of the Department of Finance in Western Visayas.

He said the construction and improvement of commercial buildings and residential houses have contributed to the increase in real property tax collection of the city.

Another factor is the good teamwork between my office and the City Treasurer's Office (CTO), he added.

Mr. Polvora said collection will further improve when the logistics and personnel support of his office is enhanced.

And definitely next year, if we would have our tax-mapping operation with the CTO and the Permits and Licensing Division Office, for sure our real property taxes will improve a lot, he said.

Land Tax Division head Arlene Memoria, meanwhile, attributed the good collection performance to streamlined systems and procedures and improved customer service.


Cebu mayors air concern over proposed real property tax hike
By Mars W. Mosqueda
Manila Bulletin, November 14, 2011

CEBU, Philippines — The League of Municipalities of the Philippines (LMP)–Cebu Chapter is appealing to the Cebu Provincial Board (PB) to set aside its proposed ordinance increasing real property taxes.

LMP–Cebu President and Dumanjug Mayor Nelson Garcia asked the legislative body to instead find other ways to generate income without passing on this particular burden to the people.

Garcia cited Cebu province´s performance in the delivery of basic services up to the province´s farthest barangays.

He also said the mayors might face public indignation if and when the proposed 50 percent increase in the market value of real property in the province is effected "most especially now that the next elections are coming. Garcia expressed such concern during a public hearing conducted on the matter by the Committee on Ways and Means chaired by PB Member Wilfredo Caminero.

The PB is proposing to increase the market values of real properties within the jurisdiction of the province in order to recover its losses in real property taxes as the cityhood of Naga, Carcar and Bogo has not yet been passed on first reading at the PB.

See BLGF´s response on this article


San Pablo folk slam 200% hike in taxes
By Maricar Cinco
Inquirer Southern Luzon, November 9, 2011

A proposal by the San Pablo City government to increase real property taxes by an average of 200 percent next year drew protests from taxpayers in the city, who also questioned the timing of the planned tax increase.

In a manifesto, the residents said the planned tax increase is an additional burden to the people of San Pablo and described it as "unreasonable and unfair."

"The current economic climate will make it impossible for most of the taxpayers to remit payments," said the manifesto, signed by at least 390 residents.

Under the proposal, taxes on all commercial lands would increase by 176.60. Those for industrial lands would increase by 51.11 percent while residential lots would be taxed higher by 242 percent.

Taxes for lands used for agricultural purposes would also increase. Rice lands would be taxed 141 percent higher, coconut farms would be taxed 197 percent higher and coffee farms would be taxed 11 percent higher.


Iloilo business community urges city gov´t for friendlier tax collection
By Tara Yap
Manila Bulletin, November 3, 2011

ILOILO CITY, Iloilo, Philippines — The business community in Iloilo is appealing to the city government for the implementation of a "friendlier" real property tax collection.

This, as the Iloilo City government is set to implement a 100 percent tax collection rate by January 2012 to regain revenue losses due to reductions in the city´s internal revenue allotment (IRA) share of R400 million with the entry of 16 new cities nationwide.

Over 350 small, medium, and large corporate and individual members of said business community asked Mayor Jed Patrick Mabilog to reconsider the city government´s proposal to impose hikes in taxes in the next three years.

The businessmen are proposing for a 75 percent implementation of the 2006 market values in 2012, 90 percent in 2013, and 100% in 2014.

Traders here say that sales in real estate and local businesses have been affected by worldwide recession which has also had a negative impact on the financial situation of Ilonggo families, particularly those substantially dependent on remittances of overseas workers.

"Reduced expenses mean a decrease in demand for goods and services, thus affecting purchasing power," the group said in a statement.

Also cited are high operational costs and especially with regard to government mandated salary increases in Western Visayas as well as in the cost of electricity.

"The business sector has always been supportive of the Iloilo City government. We value our partnership and we hope our request will be considered as a positive way to make the policies work towards the sustainability of development in Iloilo," the group underlined in their appeal to the Mabilog administration.

Those who have put their signature on a written appeal to the city government on the matter include Jose Juan Jamora III of the Iloilo Business Club, Felipe Uygonco of the Filipino-Chinese Chamber of Commerce of Iloilo, Ramon Cua Locsin of the Federation of Filipino-Chinese Chamber of Commerce of Panay, Jose Marie Agriam of the Chamber of Commerce and Industry of Iloilo, Fanny Uy of the Iloilo Multi-Sectoral Business Organization, Cesar Pelayo of the Philippine Chinese Chamber Commerce and Industry-Panay Chapter, Francis Chung of the Philippine Retailers Association-Iloilo Chapter, Valerie Maravilla of the Ilonggo Producers Association, and Dr. Sandra Sarabia-Gomez, representing the Iloilo Hotels Restaurants and Resorts Association.


COA urges LGUs to use latest fair market value
By Gregg M. Rubio
The Freeman, November 1, 2011

CEBU, Philippines - The Commission on Audit has asked local government units to implement the latest schedule of fair market values in realty tax collections instead of the old one.

COA noted that some cities and municipalities are not adopting the revised appraisals and assessment of real properties as basis in collection of real property taxes thus depriving them of additional income to finance various projects and services.

Danao City´s real tax collections for instance, were based on the CY 2000 schedule instead of using that of CY 2009.

LGUs are mandated to increase the assessment of real property once every three years except in the case of new improvements substantially increasing the value of said property or of any change in its actual use.

In the case of Danao City, the COA said "there should have been a revision of property classification and assessment of real properties last 2003, 2006 and 2009 as mandated under Art. 311 of Local Government Code of 1991."

COA also noted the same situation in the Municipality of Compostela where realty tax collections were based on the schedule of fair market value for CY 2002, instead of CY 2008.

Compostela town should also have revised their property classification and assessment of real properties last 2005, and 2008 as mandated by law, state auditors said.

COA further noted that said LGUs failed to have a list of idle lands in their jurisdiction, which prevented them from imposing an annual tax of not exceeding five percent of the assessed value of the property which shall be in addition to the basic real property tax.

"Due to non-implementation of the required appraisal and assessment of lands, the municipality/city was deprived of additional income which could have been utilized in the implementation of other projects," COA said.

COA recommended that respective councils enact an ordinance adopting the revision of the appraisal and assessment of real properties as basis in the collection of the real property taxes in order to increase their income to finance various projects and services of the LGUs and its additional funding for the special education fund projects. (FREEMAN)


Parañaque readies higher property tax
By Antonio Siegfrid O. Alegado
Business World, October 25, 2011

HOMEOWNERS and businesses in the City of Paranaque face higher real property taxes starting next year after the local government updated fair market values for land and improvements, an ordinance approved on Oct. 13 and published in a newspaper on Monday showed.

Ordinance No. 31-2011, signed into law by Mayor Florencio M. Bernabe, Jr., noted that prevailing fair market values were last revised in 1997 for land and in 1992 for buildings and other improvements.

The schedule of fair market values of real property and other improvements in the city has remained low compared to the surrounding cities of Pasay, Makati, Las Pinas and Muntinlupa, the local law claimed.

The ordinance set the following new base market values:

The same local law gave new valuation ranges for types of buildings and other structures, namely: P9,700-16,300/sq.m. for hospitals; P9,400- 16,000/sq.m. for apartelles and apartments; P8,900-15,500/sq.m. for office buildings, including banks; P8,400-15,000/sq.m. for chapels, churches and cathedrals; P7,800-14,400/sq.m. for restaurants; P7,000-13,500/sq.m. for funeral parlors; P6,600-13,200/sq.m. for schools; P6,400-13,000 for one family dwellings; P6,100-12,500/sq.m. for duplex dwellings; P6,300-12,900 for gasoline stations; P6,000-12,400/sq.m. for carpark buildings; P5,800- 12,200/sq.m. for supermarkets; P5,600-12,000/sq.m. for motels; P5,400- 11,900/sq.m. for accesoria or row houses; P5,300-11,700/sq.m. for cold storage facilities; P5,100-11,600/sq.m. for gymnasiums; P5,000-11,400/sq.m. for boarding houses; P4,800-11,200/sq.m. for hangars; P4,300-10,700/sq.m. for accessory buildings; P4,100-10,600/sq.m. for markets; P3,500- 9,900/sq.m. for factories; P3,100-9,600/sq.m. for warehouses; P3,000- 7,800/sq.m. for open sheds; and P6,600-7,100/sq.m. for swimming pools.

In a statement on its Web site, dated Oct. 21, the city government clarified that the new values for buildings and improvements apply only to new structures becoming initially taxable in 2012. The ordinance said it takes immediate effect.


City braces for full 2006 RPT market value
By Lydia C. Pendon
SunStar Iloilo, October 20, 2011

THE Iloilo City Council will decide on October 26 whether to approve the ordinance calling for the full implementation of the real property tax (RPT) based on the 2006 tax ordinance starting 2012.

City Councilor Perla Zulueta, chair of the committee on ways and means and appropriations, said the Bureau of Local Government Finance regional office, has assured the legality of the 2006 schedule of market values on real properties in the city.

The 2006 schedule of market values was only implemented at 60 percent since 2008 up to 2011 due to considerations on natural calamities and damages brought by Typhoon Frank in 2008.

Zulueta said that a department order issued by Department of Finance Secretary Cesar Purisima showed a revision of market values on real properties every three years.

However, the City Government gave away P280 million in three years without fully implementing the mandated schedule of market values, she said.

The City Government eyes the full implementation of the RPT based on the 2006 tax ordinance instead of setting new market value for real properties in 2012.

Earlier, Mayor Jed Patrick Mabilog appealed to the City Council to help him implement the 100 percent schedule of market values on real properties based on the 2006 level only without resorting for new real property taxes in 2012.

Mabilog said that city residents and the local business community will be greatly affected with the revision for increased RPT as the city reels from decreased revenues brought by the slashing of its internal revenue allotment share from the National Government.

Zulueta said there is a need to withhold the new RPT implementation and the conduct of a committee public hearing since the city is only implementing the old schedule of market values.

The Iloilo Business Club through its executive director Leah Lara initially appealed for 10 percent increase on RPT on top of the existing 60 percent instead of the 100 percent implementation.

With the full implementation of the 2006 tax ordinance next year, the city is expected to collect more than P471 million including the balance of 40 percent unimplemented RPT collection.

Records show that there are 146,326 real property units or parcels in the city. Of these, 106,573 are taxable while the 39,753 are not.


Tambunting cite flaws in ordinance
By Jean Fernando
Manila Bulletin, October 17, 2011

MANILA, Philippines — Parañaque City Vice-Mayor Gus Tambunting temporarily relinquished his post as presiding officer of the Sangguniang Panglungsod and spoke on the procedural defects of City Ordinance No. 31, entitled Ordinance Adopting the Revised Schedule of Fair Market Values of Real Property in the City of Parañaque.

Tambunting took the floor recently to be able to speak without prejudice to the councilors, threshing out the seemingly irreconcilable opposing views regarding the mentioned draft ordinance.

He cited a citizens´ group position paper which specified noncompliance with the requirements under PD 921 as one of the reasons for opposing the procedurally infirm Schedule of Market Values proposed and submitted by the City Assessors Office.

According to the Vice Mayor PD 921 is good law as per Ty vs. Trampe case and remains to be effective.

Tambunting explained that the proponents of the ordinance failed to follow the requisite procedures to erase any infirmities in the proposed ordinance.

He said that if passed, the implementation of the ordinance may be challenged and nullified.

This will effectively lay to waste all the time, effort and hard work that has been put into the crafting of the ordinance, Tambunting said.

He added that the contents of Ordinance No. 031 that was subjected to public hearing last September was not the same as the one submitted by the City Assessors´ Office.

Tambunting maintains that it is not proper for the proponents to substitute or amend the contents of the original Assessors´ recommendation with their own version prior to the conclusion of the public hearing.

He also cited the petitions for mandamus and the restraining order filed by the concerned taxpayers of the city before the Supreme Court.

The vice-mayor suggested that the City Council defer the vote and wait for the decision of the highest court of the land.

Tambunting said that the Sanggunian session held recently went overtime as the councilors debated on the issues related to Ordinance No. 031.


The Local Government Code at 20: Politics still messing up fiscal autonomy
By Likha Cuevas-Miel
October 9, 2011, Interaksyon.com

MANILA, Philippines - Politics is slowly cutting off the lifeblood of local governments and for a cash-strapped nation this is a matter of development and stagnation.

Like any other story of power and authority in this country, laws crafted for the good of many have been poisoned by the patronage politics that continues to persist-- and the Local Government Code, enacted 20 years ago with the best of intentions, is no exception.

The law contains provisions that make local government units responsible for raising revenues and the autonomy to spend these for the delivery of services to constituents. Which is logical since decentralizing powers from the national to the local governments would be impossible if LGUs are not financially independent.

However, some heads of local government and their minions, in their desire to hold on to power or bestow political favors, have botched this privilege, and politics now jeopardizes the very thing that allows LGUs to govern themselves---the ability to raise funds.

This is unacceptable as far as dilapidated bridges, crumbling school buildings, cratered roads are concerned.

Real property taxes

Levy on real property is one way local governments earn revenue and each level of LGUs has different rates and sharing formulas for the proceeds. Under the LGC, provinces may impose a tax on real estate at a rate not greater than 1 percent of the assessed value of the property. Cities and municipalities in Metro Manila may impose levies not greater than 2 percent of the assessed value.

In terms of revenue sharing, the LGC gives 35 percent of the real property tax (RPT) levied by the province to the province itself, while 40 percent goes to the municipality and 25 percent goes to the barangay where the property is located. About 70 percent of the RPT collected by the city goes to the city while the rest goes to the barangay and all the other barangays in the city where the property is located.

Assessment, appraisal and administration of RPT

Since the power to impose RPTs lies with the LGU, all real property, whether taxable or exempt, should be appraised at the current and fair market value prevailing in the place it is located. The role of the national government, through the Department of Finance, is the promulgation of regulations for the classification, appraisal, and the assessment of real property pursuant to the LGC provisions.

It is the responsibility now of the provincial, city or municipal assessor to revise the real property assessment every three years. They also must prepare the schedule of fair market values for the different kinds and classes of real property located within the jurisdiction of the province, city or municipality in accordance with the rules and regulations set by the DOF.

Inequitable valuation system

But according to a study by the Finance department´s Bureau of Local Government Finance, there is an ineffective and inequitable land valuation system---one of the four main weaknesses that contribute to an inefficient and inequitable land market. This in turn constrains the economic development of LGUs since the collection of taxes is clipped, thereby not giving them sufficient revenues to work with in delivering services to constituents.

One of the main culprits is political intervention and influence in the valuation process for the assessment of property taxes.

BLGF data shows that from 1993 up to 2006, compliance by LGUs with the requirement to revise the schedule of market values once every three years has declined from 83 percent to 25 percent.

Home Page "The process of updating the schedule of fair market values requires a political process, i.e. legislation by the local sanggunian (legislative council), and since local officials tend to avoid increasing local taxes, it is likely that the revision of the schedule of fair market values will be based more on political considerations rather than on technical reasons," the Philippine Institute for Development Studies said in its Development Research News in 1992.

The DOF concurs, saying it has found that as early as 1993, many sanggunian have "already invoked (their) prerogative to lower the values in the schedule of values. This political intervention has contributed not only to reducing revenue from property tax but also to undercutting professionalism of the assessors."

The World Bank found the situation similar in terms of trends concerning political intervention in the appraisal process and the level of market values adopted by LGUs.

Politics wreaking havoc

The DOF, in a 2002 report, said politics come in the form of pressure from groups, local property owners and the political influence placed on the assessors. "Also, councils have been known to alter the assessors´ recommendations in adopting a revised schedule of market values."

Since the powers of LGU heads, from the mayors of small towns to governors of large provinces, is all-encompassing under the Local Government Code, politicians have the authority to approve or amend the assessor´s recommended SMV, causing problems in the review and adoption of the market values.

It reaches the point where LGU heads have the authority to appoint assessors, which gives them more power in swaying favorable property assessment that would ensure their longevity in office. By keeping valuations depressed, mayors and governors would not earn the ire of voters who could retaliate come election time.

Property valuations as assessed by LGUs are deemed outdated and distorted. This situation not only brings problems in terms of taxation, but does not give equity and fairness to property owners. It is also not conducive to encouraging investments and confidence in the land market.

Home Page "Since most of the LGU values no longer reflect the true conditions of the local property market, the country´s valuation system has acted as a disincentive for private investors to take a more vibrant role in economic development. In the same vein, many government-led projects and investments have been delayed due to just compensation issues and lengthy court litigations," Senator Ferdinand Marcos, Jr. explained in his Valuation Reform bill.

Change the Local Government Code?

In 1999, the Land Administration and Management Project or LAMP1 recommended that "a legislative change [must be done] to the Local Government Code to take the regulatory and approval powers back to the DOF-BLGF."

There should be a clear separation of the real property valuation and taxation within the LGUs and the "simplest way (not necessarily the easiest) is to reinstate the national government´s role as the enforcer of the law," it added.

This is a radical change, however, that no member of Congress would dare attempt.

To resolve this problem without destroying the basic tenet of the LGC, the 200-member Philippine Association of Provincial and City Assessors suggested that the schedule of market value implementation procedures be amended to make it independent and free from politics. It also proposed that the appointment procedures for assessors be removed from the provincial governors, city mayors and municipal mayors.

To complement these changes, legislators are proposing a law to reform the valuation of property to separate the technical function of valuation from the political function of taxation in LGUs through the transfer of SMV approval from the sanggunian to the DOF.

The Valuation Reform Act being proposed by Marcos seeks the establishment and adoption of a uniform valuation standards benchmarked from international standards, principles and best practices. It also pushes for the adoption of market value as the single real property valuation base for taxation and other purposes.

As it is, there are 23 national government agencies and almost 1,300 LGUs, not counting the private appraisers, who do valuation using different methods and standards. More often than not, the situation causes inconsistent real property values where one property has conflicting values.

Another feature of this bill, among others, is the development and maintenance of a comprehensive and up-to-date electronic database of real property transactions and prices of materials for buildings, machinery and other structures that can be accessed by public and private sectors.

Along with this, Congress has already enacted the Real Estate Service Act of 2009 or Republic Act 9646, which professionalizes the valuation practice of appraisers and assessors. These appraisers and assessors are duly licensed by the Philippine Regulatory Commission, and thus, one cannot be appointed by the government to undertake property valuation without proper qualifications.

Time for a revisit?

The Local Government Code seeks to empower LGUs but in doing so, there may have been some unintended negative consequences. To ensure that the spirit of the law is not eroded, the government, especially legislators, may have to revisit the implementing rules and regulations for the LGC--or formulate remedies--to be responsive to the current setting.