Bureau of Local Government Finance (BLGF), a unit under the Department of Finance (DoF), says cities and municipalities are losing an estimated P30.5 billion in revenues annually as a result of outdated real property values, emphasizing the need for valuation reforms in the real property sector.
Acting Deputy Executive Director Jose Arnold Tan of the BLGF said cities missed the opportunity of collecting as much as P23.1 billion in incremental revenues from real property taxes, while provinces could have gotten as much as P7.4 billion more if their Schedule of Market Values (SMVs) updated and aligned with international standards.
Such reforms in the real property tax system constitute the third package of the Duterte administration’s comprehensive tax reform program.
Finance Secretary Carlos Dominguez III said these reforms will further sustain and empower the real estate market, attract more investments, and generate additional revenues for local government units.
“Essentially, real estate is the most valuable asset and biggest financial resource,” Dominguez said.
“But its contribution to government revenues, particularly for local governments, has remained dismal due to outdated SMVs, poor collection efficiency and tax administration and lack of uniformity in the valuation of real property.”
Tan said for provinces alone, the P7.4 billion in missed real property taxes could have built either 551 public markets, 771 kilometers of roads, 7,542 classrooms or 2,155 daycare centers.
Meanwhile, the P23 billion in real property taxes that cities fail to collect could have built either 513 transport terminals, 339 landfills, 1,154 satellite health centers, or 3,330 low-cost resettlement projects, he added.
Sources: Philippine Daily Inquirer
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