BIR speeds up sale of acquired properties to fill budget deficit

The Bureau of Internal Revenue (BIR) is accelerating the sale of forfeited properties that it has acquired as payment for taxes and penalties, in the hope of scraping up more cash to bridge the government’s runaway deficit.

To expedite the sale of these properties, the BIR issued a new revenue regulation setting the parameters for the sale of acquired or forfeited properties through public bidding supervised by the Commission on Audit.

The new BIR regulation, provides that acquired or forfeited properties will be sold after a one-year redemption period beginning with the forfeiture of the property.

The sale, according to the BIR, would be limited to Philippine nationals and corporations since Constitution specifically prohibits foreign nationals from owning land in the Philippines.

The new regulation also mandates the BIR commissioner to determine the minimum bid price based on the "latest fair market value" shown in the tax declaration issued by the local government or municipal assessor, whichever is higher.

According to the BIR, bidders will be required to post a bond equivalent to 10 percent of the minimum bid price at least one day before the actual public auction.

Unless the BIR allows an extension of the time to pay, the bureau said the winning bidder will be required to pay his bid in cash or manager's check within two days of the receipt of the notice of award.

All taxes and expenses related to the issuance of the new title will be shouldered by the winning bidder.

The BIR said it will allow negotiated or private sale only if the public bidding has failed at least twice in a row. Even then, the BIR said the negotiated sale would have to be approved by the Department of Finance (DOF), specifically the finance secretary.

The BIR is now conducting a full audit of the real estate properties that have been turned over to the government as payment for taxes and penalties to determine exactly how much it would generate from the sale of the properties.

The bureau is expected to go into full swing with the sale of forfeited properties beginning next year when the Arroyo administration is expecting to generate a budget deficit of up to P202 billion.