THE House of Representatives on Monday approved on third and final reading a measure instituting reforms in the country’s real property valuation.
Voting 224 affirmative, seven negative and one abstention, lawmakers approved House Bill 4664 or Real Property Valuation Reform Bill.
The bill, which provides for Package 3 of the Comprehensive Tax Reform Program (CTRP), will now be transmitted to the Senate for its own deliberations.
The proposal seeks to reorganize the Bureau of Local Government Finance (BLGF), and seeks an allocation of P58 million to set up a Real Property Valuation Service within the BLGF for 2020.
Pursuant to the Local Government Code of 1991, the bill seeks to grant each local government unit (LGU) the power to create its own sources of revenue and to levy taxes, fees and charges.
The bill aims to harmonize the real property valuation for taxation purposes, which frees the BIR from the task of 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.
House Committee on Ways and Means Chairman Joey Sarte Salceda, principal author of the bill, said 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, explaining that, “we expect P30.2-billion estimated revenue for the first year of the implementation for local government units.”
Package 3 is also beneficial to the national government as it will address the issues on right of way, which have plagued the speedy implementation of vital infrastructure projects.
The lawmaker said the government would also save P25.2 billion per year as costs for notice, conduct of hearing, and publication of zonal values are eliminated.
For his part, Committee on Government Reorganization Chairman Mario Vittorio Mariño, sponsor of the bill, said it will 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.
Question
During the BusinessMirror Coffee Club Forum hosted by the ALC Media Group on November 21, Buhay Party-list Rep. Lito Atienza said he is ready to question the proposed law before the Supreme Court once the House Bill 4664 gets passed in Congress.
Atienza also reiterated this position after he voted against the passage of the bill in the plenary.
“I will bring this to the people, I will bring this to the Supreme Court,” he said.
According to Atienza, the bill contradicts the provision of the 1987 Constitution on local autonomy.
“It affects the power of local government and it eventually affects the tax payers 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, a former three-term mayor of Manila.
Atienza also warned that the property valuation mechanism being handled by the national government could 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.
Protection
In voting affirmative, Albay Rep. Edcel Lagman, meanwhile, said the proposal will protect residential lot owners and real estate.
“Since generally ownership of residential lots is considered a dead investment, residential lot owners are protected from any undue increase in the schedule of market values which would escalate the tax rate by recognizing the power of local government units to reduce the consequential tax rates for residential lots without any limitation as to their location and size,” he said.
“Because the country is calamity-prone, real-estate properties located in areas devastated by calamities, both natural and man-made, should be given protection from the imposition of higher real-estate taxes upon recommendation by the provincial and city assessors pursuant to an order of the secretary of Finance,” Lagman added.
Lagman said he also voted on the passage of the bill because of the provision providing standards in the exercise of the Secretary of Finance to review, approve, or reject schedule of market values.
“The authority of the Secretary of Finance to review, approve or reject the recommended schedule of market values made by the local government units is limited or circumscribed by observing the standards of property valuation and assessment which are internationally recognized,” he said.
Image credits: AP/Aaron Favila