The Department of Finance (DOF) urged local government units (LGUs) to strengthen their revenue mobilization capacities through real property tax collections in order to support the country’s economic resurgence.
During the Bureau of Local Government Finance (BLGF) anniversary seminar on Tuesday, Oct. 25, Finance Secretary Benjamin E. Diokno said real property tax offers a progressive source of revenue for LGUs.
Thus, LGUs need a credible real property valuation system to help improve government's revenue generation capacity, Diokno said.
For this reason, the finance chief said the DOF supported the passage of the Real Property Valuation and Assessment Reform bill.
Once passed into law, the proposed measure will 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, he said.
The bill is the third package under the previous administration’s Comprehensive Tax Reform Program (CTRP).
Diokno also 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,” Diokno said.
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.