A SENIOR lawmaker on Thursday disclosed his plan to question before the Supreme Court the measure providing for Package 3 of the Comprehensive Tax Reform Program (CTRP), which seeks to institute reforms in the country’s real-property valuation.
Addressing the BusinessMirror Coffee Club Forum hosted by the ALC Media Group, Buhay Party-list Rep. Lito Atienza said he is ready to question the proposed law before the SC once House Bill 4664, or Real Property Valuation Reform Bill, gets passed in Congress. According to Atienza, the bill contradicts the provision of the 1987 Consitution on local autonomy.
“It affects the power of local government and it eventually affects the taxpayers capacity to pay or not to pay or be able to pay their real-estate taxes; in so doing it will affect the development goals of the LGUs,” said Atienza, the only Manila mayor who held three consecutive terms.
During his tenure, he had pointed to his administration’s ability to substantially increase revenue without having to unduly jack-up taxes, especially real property taxes which account for bulk of LGU revenue.
“It [the passage of Package 3] will not help. We all know that the key to progress is local autonomy as already enshrined in the Constitution. The Constitution provides that the government shall ensure local autonomy,” he said.
Atienza also warned that the property valuation mechanism being handled by the national government could also be a “major source of corruption.”
“If we allow national government to handle this property valuation, it will again be a major source of corruption. Let the elected people in the LGUs handle it. LGUs are more powerful over the national government in terms of developing and funds generation especially in the issue of of real-estate tax, which is 100 percent local,” he added.
HB 4664 establishes a single valuation base for taxation, through the adoption of the schedule of market values (SMVs) of LGUs, and provides for the use of the updated values as benchmark for other purposes, such as lease, rental, acquisition, right of way, etc.
The bill aims to insulate valuation at the local level from undue politicization. However, LGUs shall continue to set, adjust, and regulate tax rates and assessment levels.
HB 4664 is now pending on third and final reading approval at the House.
“I will continue to fight that. I will question its constitutionality. I can always run to the SC and file a case. I am willing to make a move [to stop this proposal],” he said.
Under the bill, the reforms will broaden the tax base used for property and property-related taxes of the national and local governments, thereby increasing government revenues without increasing the existing tax rates or devising new tax impositions.
Package 3’s proponents have claimed that by improving the quality of valuation of local governments and making the revisions frequent, efficient, transparent, reliable and attuned to market developments, it impacts favorably on revenue generation and resource mobilization of local governments to fund their service delivery requirements. The reforms are also expected to foster private investors’ confidence, and build the public’s trust in the valuations of government, they added.
The bill also provides leadership and policy direction to LGUs on real property valuation, and appraisal for taxation and other purposes, including the development and maintenance of valuation standards, the regulation of valuation and appraisal activities and other related matters, and the promotion of valuation and appraisal training and seminars.
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: LGUs have power
However, House Committee on Ways and Means Chairman Joey Sarte Salceda said pursuant to the Local Government Code of 1991, the bill seeks to grant each LGU 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 real property valuation reform bill is pro-local government, saying “we expect P30.2 billion in estimated revenue for the first year of the implementation for local government units.”
Committee on Government Reorganization Chairman Mario Vittorio Marino, sponsor of the bill, said the bill 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 will continue to set, adjust, and regulate tax rates and assessment levels,” he said.
Image credits: Rudy Esperas