House leader seeks bigger ad valorem tax on idle lands

A House leader has proposed to raise the ad valorem tax on idle
private lands to 10 percent from the present five percent to serve as
deterrent against non-utilization of these properties for productive
purposes and to encourage local government units to maximize their
revenue potential.

Rep. Roger Mercado (Lone District, Southern Leyte) said despite
present laws levying annual taxes on idle lands, large tracts of
privately-owned lands have remained undeveloped over the years.

“The laws failed to effectively control the unjust and unproductive
practice of rich individuals, partnerships and corporations of
acquiring vast tracts of lands to speculate for profit on the future
increase in the market value of such lands,” he said.

Mercado, chairman of the House Committee on Transportation, said
landowners would rather let their lands remain idle than invest money
for their cultivation, utilization and development since, in time, the
market value of lands, whether utilized or not, would still increase.

“Unfortunately, such practice hinders the use of our limited natural
resources to the fullest and prevents their equitable distribution to
those who need them most,” Mercado said.

Mercado cited that under Section 42 of Presidential Decree No. 464
entitled “Enacting A Real Property Tax Code” dated June 1, 1974, the
President of the Philippines, at his discretion or upon recommendation
by the Secretary of Finance, may authorize provinces, cities and
municipalities to levy, assess and collect an additional real property
tax on idle private lands at a rate of not exceeding two percent per
annum based on the assessed value of the property. This is to provide
local governments with adequate funds with which to underwrite basic
and essential public services.

This was subsequently amended by P.D. No. 1446 dated June 11, 1978 by
imposing an additional real property tax on idle lands at the rate of
five percent per annum based on the assessed value of the property as
determined by the provincial, city or municipal assessor.

At present, the Local Government Code or Republic Act 7160 provides in
Section 236 that LGUs may levy an annual tax on idle lands at the rate
of five percent of the assessed value of the property which shall be
in addition to the basic real property tax.

In House Bill 5688, Mercado sought an amendment of Section 236 of RA
7160 on additional ad valorem tax on idle lands so that “a province,
city or municipality within the Metro Manila Area, shall levy and
collect an annual tax on idle lands at the rate of 10 percent of the
assessed value of the property which shall be in addition to the basic
real property tax.”

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: