THE REFORM of the real estate appraisal system will create new sources of income for local communities and make them more self-reliant by reducing their dependence on national government funding, according to the Office of Local Government and Finance ( BLGF).
BLGF Executive Director NiÃ±o Raymond B. Alvina made the statement before the Senate Ways and Means, Local Government and Finance Committees, which are reviewing three Senate bills aimed at establishing a standard assessment basis for taxation.
Mr Alvina noted that 60% of LGUs use obsolete property appraisals, adding that around 97 cities and 40 provinces do not comply with the requirement to reassess properties every three years.
When provinces use obsolete Market Value Lists (SMVs), they forgo as much as 7.4 billion pesos in property taxes, Alvina said.
Cities are missing about P23,077 in property taxes when they use out-of-date VMS, he added.
âIf fully implemented and properly administered, property tax is a progressive and stable source of revenue to be shared with municipalities, barangays and local school boards,â said Alvina.
He said property taxes could generate up to 30.5 billion pesos in additional revenue once the measure is approved.
âThis reform would also ensure the collection of higher education funds. This will support the growing needs, operations and demands of public schools in Local Government Units (LGUs). We estimate that the increase in the allocation for public school students, if this package three is carried out, could potentially increase by 36%, which means more funds available for the public education sector â, a- he declared.
At the same time, he allayed fears that the proposed measure would weaken the fiscal power of local authorities.
Mr Alvina said local authorities “would still be responsible for setting values, evaluating, imposing tax rates and preparing annual budgets based on the projected revenues resulting from their decision. concerning the valuation level and the tax rate “.
âWe want to stress that the measure will support local self-government, as we help LGUs to improve key elements of their property tax administration process,â he said. âThree of the four components of overall property tax administration will continue to be part of the political function of LGUs. “
“LGUs will continue to regulate and determine tax rate and valuation levels themselves, while securities are prepared by first-time buyers, subject to compliance review and then approved by the finance secretary.”
The proposed measure is one of the last two packages of the overall tax reform program of the administration. – Kyle Aristophere T. Atienza