REFORM of the property assessment system will create new sources of revenue for local authorities and make them more self-sufficient by reducing their dependence on national government funding, according to the Office of Local Government and Finance ( BLGF).
BLGF Executive Director Niño Raymond B. Alvina made the statement before the Senate Ways and Means, Local Government, and Finance Committees, which are considering three Senate bills to establish a baseline for assessment. standard for taxation.
Mr Alvina noted that 60% of LGUs use outdated property appraisals, adding that around 97 cities and 40 provinces are not meeting the requirement to re-evaluate properties every three years.
When provinces use outdated market value lists (MVS), they forgo up to 7.4 billion pesos in property taxes, Alvina said.
Cities miss out on about 23,077 pesos in property taxes when they use outdated VMS, he added.
“If 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,” Mr. Alvina said.
He said property taxes could generate up to 30.5 billion pesos in additional revenue once the measure is approved.
“This reform would also ensure the collection of funds for higher education. 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 third package is realized, could potentially increase by 36%, which means more funds available for the public education sector”, a- he declared.
In the meantime, he has allayed fears that the proposed measure will weaken the fiscal power of local governments.
Mr Alvina said local authorities ‘would still be responsible for setting values, assessing, imposing tax rates and preparing annual budgets based on projected revenues resulting from their decision in terms of assessment level and tax rate”.
“We want to emphasize that the measure will support local self-government as we help LGUs improve key elements of their property tax administration process,” he said. “Three of the four components of overall property tax administration will continue to be part of the policy function of LGUs.”
“LGUs will continue to regulate and determine the tax rate and assessment levels themselves, while values are prepared by accessors, subject to compliance review, and then approved by the finance secretary.”
The proposed measure is one of two final packages in the administration’s comprehensive tax reform program. — Kyle Aristopher T. Atienza