The House of Representatives has approved on second reading a measure providing for the Package 3 of the Comprehensive Tax Reform Program (CTRP), which institute reforms in the country’s real- property valuation.
Through viva voce voting, lawmakers approved House Bill
4664, or real property
valuation reform bill last Tuesday.
House Committee on Ways and Means Chairman Joey Sarte Salceda, principal author of the bill, said the proposal seeks to reorganize the Bureau of Local Government Finance (BLGF).
The bill seeks an allocation worth P58 million for the establishment of a real-property valuation service within the BLGF for 2020.
Salceda said pursuant to the Local Government Code (LGC) of 1991, the bill seeks to grant each local government units (LGUs) the power to create its own sources of revenue and to levy taxes, fees and charges.
He added this will enable the LGUs to become self-reliant and perform their role as development partners of the national government. Salceda said the real property valuation reform bill is pro-local government, saying “we expect P30.2-billion estimated revenue for the first year of the implementation for local government units.”
Also, Salceda said the Package 3 is also beneficial to the national government as it will address the issues on right-of-way.
“Without valuation reform, right-of-way acquisition could delay the delivery of much of these projects. With every year of delay, the opportunity cost to the economy increases,” the lawmaker added.
“This is beneficial to the national government because almost P150 billion in projects are delayed every year because of right-of-way acquisitions,” he said.
The lawmaker said the government would also save P25.2 billion per year due to the elimination of costs for notice, conduct of hearing, and publication of zonal values.
Also, Salceda said real property valuation reform is pro-investment, saying the real estate is best served by the passage of the proposed law.
The bill aims to harmonize the real-property valuation for taxation purposes, which releases the Bureau of Internal Revenue from promulgating the schedule of zonal values.
The bill establishes and maintains valuation standards to govern the valuation of real property in the country. It also provides a comprehensive and up-to-date electronic database of all real-property transactions. The measure also ensures transparency in real-property transactions to protect the public and develop confidence in the work of appraisers and assessors.
For his part, Committee on Government Reorganization Chairman Mario Vittorio Mariño, sponsor of the bill, said the measure aims to promote the development of a just, equitable and efficient real-property valuation system.
“The reform will broaden the tax base for local and national property and property-related taxes, and expedite valuation-based government activities, such as right-of-way acquisition and administration of land transfer taxes. This will neither impose new taxes nor current tax rates since the local government units (LGUs) will continue to set, adjust, and regulate tax rates, and assessment levels,” he said.
“This is to enable LGUs to attain their fullest development as self-reliant communities and make them more effective partners in nation building. However, the progressive dependence on internal revenue allotment (IRA) still manifests despite the devolved responsibilities, powers, and functions provided under the LGC,” he added.
While real property is considered the most important natural resource and the biggest financial asset of a country’s wealth, Marino said LGUs fail to maximize the possible financial contribution that real properties may provide.