MANILA – The Department of Finance (DOF) is urging local government units (LGU) to raise the official property values that property taxes are based on to generate additional revenues.
The Asian Development Bank said property prices can be 200 to 500 percent more than official values, resulting in tax revenue losses.
Finance Sec. Cesar Purisima said 15 provinces and cities have just raised official property values, but that 130 more local governments haven't.
“There are still about 130 provinces and cities that are already due for revision and updating of property values, as required by law. LGUs, especially those in the progressive regions, are once again reminded to follow this reform path in land governance,” Purisima said.
“This year, there are 15 additional provinces and cities that have implemented new property assessments after long years of non-revision of their SMVs. I commend the assessors and the officials from these LGUs for performing their mandate. But we must cover more,” he added.
Official values, known as assessed values, are the basis for property taxes that go to local governments and taxes on sales and other transfers, which go to the national government.
Purisima also said revenue collections from LGUs remain to be below 1 percent of the country’s gross domestic product, which shows that there is room for improvement.
DOF data, meanwhile, showed that real property tax at the city, municipal, and provincial level had negative collection growth rates from 2009 to 2010.
There was also an average of 9.8 percent decline across the three levels despite the increasing prices in real estate.