A newly created interagency governing board (IGB) will supervise reforms in local government units, particularly in real property tax collection and management, Business Mirror reported.
Under Administrative Order No. 40, the reform initiatives aim to boost revenue from real property taxes in local government units through the improvement of appraising property values. The IGB will primarily eliminate outdated rates and overlapping valuations.
Interagency Governing Board
The Department of Finance (DOF) will be the chair-agency for the IGB. The member-agencies are the National Economic and Development Authority (NEDA); Department of Budget and Management (DBM); Department of Interior and Local Government (DILG); Department of Information and Communications Technology (DICT); Bureau of Internal Revenue (BIR); and the Bureau of Local Government Finance (BLGF).
There will also be a representative each from the League of Provinces, Cities, and Municipalities. A representative from a non-government organization and another from the private sector will also be part of the board.
The IGB will meet at least twice a year, or when called by the Chair.
The administrative order will last until July 31, 2021, unless the president extends it. Before the group is dissolved, they will publish an accomplished report about what projects they conducted and how the funds were used.
Property Valuation Reform
The Department of Finance is pushing for two more tax reform measures geared towards improving the current property valuation system, ABS-CBN News reported. Under the Comprehensive Tax Reform Program, Package 3 will “broaden” the tax base used for property-related taxes. Package 4, on the other hand, will simplify passive income and financial intermediary taxes.
According to an Asian Development Bank study, cited in this Inquirer report last year, the country will see a 25 percent increase in tax collections beginning 2023 if the outdated real property valuation system will be improved. The growth in collection could be as much as 90 percent by 2025.
In their estimates, provincial real property taxes would increase to P17.56 billion in 2023, P23.23 billion in 2024, and P30.63 billion in 2025 if valuation reforms are implemented. Property taxes in cities, on the other hand, would jump to P65.76 billion in 2023, P87.01 billion in 2024, and P114.73 billion in 2025.
For ADB, a property tax hike will help increase revenues and support recovery initiatives of governments, including poverty alleviation, Business World reported. Among the medium to long-term strategies they recommended are taxes on property, such as recurrent taxes on immovable property, recurrent taxes on net wealth, taxes on estates, inheritances and gifts, as well as progressive income taxes.
Local Government Tax Collection
At the height of the pandemic last year, LGUs established online portals to collect real property taxes and facilitate safer payments.
In June, the Makati City government launched its digital platform Makati Online Payments, Philstar reported. The city had a double-digit percentage increase in tax collection in 2019 with real property taxes amounting to almost P6 billion. Manila Standard mentioned that this boosted Makati’s revenue, making it the richest LGU in the mentioned period.
For Mandaluyong residents, the city government introduced the virtual payment platform in July 2020, Manila Bulletin reported. Real property was validated through the tax declaration number.
Meanwhile, it was in October that Quezon City’s e-services was launched, as mentioned in another Manila Standard article. The city government continues to encourage property owners to use the portal for safe and convenient payment.
For Pasig City, the online services facility was formally introduced a month ago. The officials rolled out the first phase of the project, covering selected barangays, the Philippine Information Agency (PIA) reported.
Real Estate Industry’s Digitalization
As reforms take place in real property taxation and local government units move to online solutions due to the pandemic, the property industry itself has been seeing changes in response to the current crisis. In the same way, technology is at the forefront of such transformations. The purchase of properties has been taking place in virtual platforms.
On May 3, the country’s first and biggest online housing fair, featuring trusted real estate developers, will kick off. Organized by Lamudi, the event will feature high-quality projects from RLC Residences, AboitizLand, Federal Land, Shang Properties, Primehomes, Solar Resources, PH1 World Developers, ACM Homes, DMCI, PIK, Taft Properties, Filinvest Land, Suntrust Properties, and PA Properties.
Property seekers will be able to get exclusive property deals and catch relevant webinars. The registration is free.
Article and Photo originally posted by Lamudi last April 30, 2021.
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