The Department of Finance (DOF) has lauded the House of Representatives (HOR) for its approval of House Bill (HB) No. 4664 or the Real Property Valuation bill, which, once signed into law, will generate additional revenues for local government units (LGUs), stimulate the real estate market and haul in more investments from the private sector.
Lawmakers pointed out that this measure will also help speed up the implementation of President Duterte’s centerpiece initiative “Build, Build, Build” as the use of a new and uniform schedule of market values (SMVs) on real property will address right-of-way (ROW) issues that at times delay the government’s acquisition of private lands intended for public infrastructure projects.
HB 4664, also known as Package 3 of the Comprehensive Tax Reform Program (CTRP) of the Duterte administration, proposes the adoption of internationally accepted real property valuation standards, the use of single valuation for land transactions taxation, the use of SMVs for ROW acquisition, and the strengthening of the valuation arm of the DOF-attached Bureau of Local Government Finance (BLGF).
This bill was passed by the House last week on third and final reading by a 224-vote and one abstention.
Finance Secretary Carlos Dominguez III thanked Batangas Rep. Mario Vittorio Mariño, chairman of the House committee on government reorganization, and the other members of the House for the swift approval of this CTRP package.
“We thank the committee chairman, Rep. Mariño, for sponsoring HB 4664. We are grateful that the chairman and the members of the committee and of the House in general have seen the urgency of passing the CTRP’s Package 3, which will generate additional revenues for LGUs, stimulate the real estate market, and haul in more investments,” Dominguez said.
Dominguez expressed the hope that the Senate will act on its version of this Real Property Valuation Reform bill in the first half of 2020.
Mariño stressed the relevance of passing the reform for LGUs during the House plenary deliberations.
“I became a city councilor twice and I was able to participate in updating our market values as far as our local government is concerned. Ang problema po d’yan sa pag-a-update ng market values ay isa itong political decision. Usually, karamihan po sa ating LGUs ay hindi po ginagalaw ‘yang mga tax, assessment level, tax rate, and also the market value kasi takot po sila sa backlash politically. Kaya po karamihan ng LGUs ay mababa ang revenue at koleksyon,” Mariño said.
Marino pointed out that the proposed measure does not take away the power of local Councils to adjust the tax rates and assessment levels to cushion the impact of increased values of properties.
“The reform will benefit a lot of LGUs that do not have the database, capacity to update their market values, and the necessary training to do assessment,” he added.
Meanwhile, Albay Rep. Joey Salceda, chairman of the House committee on ways and means, said during the committee deliberations that, “Without the valuation reform, ROW acquisition could delay the delivery of the ‘Build, Build, Build’ program. With every year of delay, the opportunity cost to the economy increases.”
Salceda emphasized that the timely implementation of “Build, Build, Build” will be a significant stimulus to the Philippine economy, as improved infrastructure entices investment in the real estate market.
The Albay solon also pointed to case studies highlighting the importance of a credible valuation system.
“Meron po tayong case studies na nagpapakita kung gaano katagal at paano nagiging mahalaga ito pong valuation reform. Halimbawa, itong Evergreen Manufacturing versus DPWH (Department of Public Works and Highways). Simula ng 2000, nakarating po ng 2017 dahil nagsimula sa kakulangan ng isang (credible valuation) basis,” Salceda said.
In sponsoring the measure, the House ways and means committee senior vice chairman, Nueva Ecija Rep. Estrellita Suansing, stressed the urgency of passing the reform so the government can harness the full potential of real property to contribute to local and national development.
“A World Bank study indicated that 50 percent to 70 percent of the national wealth is contained in land alone. Real property, therefore, has the largest potential contribution to national income for funding economic and social development,” Suansing said.
President Duterte emphasized in his 4th State of the Nation Address (SONA) last July the need to improve the current valuation system as he called on the Congress to immediately pass the proposed Real Property Valuation Reform bill. “The valuation system has to be improved for local government units,” Duterte said.
At present, LGUs prepare the SMVs, which is just one of many conflicting values currently used for various government purposes and private transactions. SMVs are also often outdated and set without standard technical procedures, leading to an eroded real property tax base for LGUs.
The DOF asserted that Package 3 will broaden the base used for property-related taxes of national and local governments, thereby increasing revenues without necessarily imposing new taxes or increasing existing rates.
More on TaxReform News
PHL strong enough to “weather” eco storms—Dominguez →
Date Posted: November 1, 2018The Philippines is strong enough to “weather the storms” looming over its economy, given that … Continue reading PHL strong enough to “weather” eco storms—Dominguez
DOF to urge Congress to pass higher tobacco tax rates to further discourage smoking, raise more healthcare funds →
Date Posted: April 29, 2019The Department of Finance (DOF) will “try its best” until the last minute to convince the Congress to impose new “sin” tax rates on tobacco products that will make cigarettes pricey enough to further discourage smoking, especially among teenagers.
E-cigarette manufacturer backs ‘sin’ tax reform →
Date Posted: February 3, 2020A major manufacturer of cartridge-based electronic cigarettes has committed to fully comply with a new … Continue reading E-cigarette manufacturer backs ‘sin’ tax reform
WE RECOMMEND
Over 1,000 entrepreneurs take part in ‘Sulong’ regional forums
Date Posted: April 29, 2019More than 1,000 entrepreneurs, mostly representing small and medium enterprises (SMEs), were consulted by the … Continue reading Over 1,000 entrepreneurs take part in ‘Sulong’ regional forums
