A proposed law reforming real estate taxation in the Philippines will make property valuation more market-driven through a government database, a finance official said on Thursday.
Finance Undersecretary Maria Cielo D. Magno, speaking at a Senate ways and means committee hearing, said under the proposed Real Property Valuation and Assessment Reform Act, local government assessors will use market data as basis for setting the valuations and the corresponding tax rates.
“We recognize that we are giving power and accountability also to the local assessor, but the assumption is that in this process, we’ll also be building a database where the local assessor should refer to,” she said.
“That database should reflect market transactions because the idea is that the determination of the valuation should not be political anymore but is determined by the market,” she added.
Senator Sherwin T. Gatchalian, who chairs the committee, raised concerns that city and municipal assessors offices are getting too much power under the bill.
Under the proposal, the assessor, in coordination with the treasurer, will estimate and submit a revenue and tax impact report with the approved schedule of market values to the mayor.
The mayor will then send this to the local council for the enactment of an ordinance.
Mr. Gatchalian pointed out that under such a set-up, property owners do not seem to have recourse for contesting the assigned market values.
Ms. Magno explained that real estate owners can participate in the public consultations that will be jointly conducted by the Bureau of Local Government Finance, Bureau of Internal Revenue, and the local assessor prior to the drafting of new valuation rates.
“In practice, residents would tend to focus on the valuation of their property to lower their tax liability, but this time it will shift because the valuation of your property will in fact give you a correct indicator on how your asset is growing,” she said.
Real property taxes in the Philippines are independently determined and collected by local government units, particularly cities and municipalities.
Source: Business World