FEF backs amendments to real property valuation

MANILA, Philippines — The Foundation for Economic Freedom (FEF) is backing the proposed amendments to the country’s real property valuation system under the third package of the Comprehensive Tax Reform Program, saying this would lessen delays in the implementation of government infrastructure projects.

In a statement yesterday, the group made up of prominent economists, former government officials and members of the business community, said government projects are often delayed partly because of compensation issues in the process of obtaining right-of-way.

This is because of conflicting land values, the result of overlapping valuations, which FEF said also entails additional costs to the government.

“It will address the present problem of multiple, overlapping valuations through the adoption of a uniform valuation standard and establishment of a single valuation base for taxation purposes,” FEF said.

Package 3 of the Comprehensive Tax Reform Program (CTRP) aims to develop and maintain an equitable and efficient real property valuation system.

FEF said amendments to the real property valuation system would also enable the Bureau of Local Government Finance (BLGF) to implement uniform valuation standards in compliance with international best practices, with oversight by the Department of Finance (DOF). Assessment levels and tax setting, meanwhile, would remain with the local government units (LGUs).

“Separating valuation from political bodies will also ensure that the practice is free from undue politicization,” FEF said.

The amendments would also ensure timely updating of the Schedule of Market Values (SMVs). At present, only 38.8 percent of local government units and half of regional development offices have updated SMVs.

“Outdated and below market valuation mean foregone government revenues from property ownership and conveyances,” FEF said.

Based on 2009 to 2014 records of BLGF, real property taxes contribute around 31 percent of the LGUs local sources of income, it added.

“The proposed reform will increase government revenues and at the same time increase local autonomy as it will improve LGU financial self-sufficiency,” FEF said.