The Department of Finance (DOF) advised local government units (LGUs) to strengthen their revenue mobilization capacities through real property tax collections in order to support the country’s economic resurgence.
“Real property tax offers a progressive source of revenue for LGUs. This is strengthened by a credible real property valuation system in improving the government’s revenue generation capacity,” said Secretary Benjamin Diokno during the Bureau of Local Government Finance (BLGF) Anniversary Seminar: Comparative Analysis of Property Tax in Selected Southeast Asian Countries on October 25, 2022.
The BLGF seminar aims to exhibit best tax administration practices in Southeast Asia, introduce new technologies for local governments, and enlighten LGUs on the prospects of real property tax and valuation reforms.
The DOF, through the BLGF, monitors the timely updating of the real property tax base and rates of LGUs. Recommendations to maximize real property collections stem from its findings on the inaccurate representation of economic gains from the property sector. Despite the sector’s growth, the valuations indicated in LGUs’ schedules of market values (SMVs) are at record lows.
To address this, the DOF supports the passage of the Real Property Valuation and Assessment Reform bill, which aims to promote the development of a just, equitable, and efficient real property valuation system that will positively impact revenue generation and resource mobilization performance of LGUs. The bill is the third package under the previous administration’s Comprehensive Tax Reform Program (CTRP).
Lastly, Secretary Diokno reiterated his call for digitalization and commended LGUs that were able to digitalize treasury and assessment operations through electronic payments and implement real estate and geographic systems to enhance real property tax collections. He also took the opportunity to encourage local assessors to do the same for the smooth delivery of services.
“In the new normal, we need to make sure that our fiscal position is stable enough to enhance our healthcare system, endure economic shocks, and continue to improve our public services through digitalization,” Secretary Diokno said in closing.