Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
First Regular Session

House Bill No, 6187 _

Introduced by Representative Ron P. Salo

EXPLANATORY NOTE

In 1991, Republic Act No. 7061, or the Local Government Code was passed
into law, giving life to the Constitutional grant of taxing authority among Local
Government Units (LGUs). Sec. 5, Art. X of the 1987 Constitution specifically
provides that,

“Each local government unit shall have the power to create its own sources of

revenues and to levy taxes, fees and charges subject to such guidelines and
limitations as the Congress may provide, consistent with the basic policy of
local autonomy...”

As provided under Sec. 237 of the Local Government Code of 1991, provinces,
cities, and municipalities within Metro Manila may levy an additional idle land tax at a
rate not exceeding five percent (5%) of the assessed value of the property, which is
‘on top of the basic real property tax. The additional idle land tax was intended to
penalize land owners who have failed to utilize their property over a considerable
period of time, while at the same time providing additional source of revenue for the
LGU.

Unfortunately, despite the disincentive imposed upon the owners of idle lands,
many remained undeveloped, much less utilized. In fact, in February 2017, President
Rodrigo R. Duterte announced that he plans to double the taxes of idle lands which
will not be developed within a decade. The President said,

“Yung mga bakante na naghintay lang ng speculation, naghintay lang ng araw
‘kung magmahal na ang lupa bago gamitin | will tax idle lands heavily.”

Corollary, Republic Act No. 10176°was passed into law on July 2011 which
mandated that all provinces, cities and municipalities with their component
barangays to fix an appropriate date every calendar year which shall be deemed
suitable according to the proper time and season for planting trees in the respective
provinces and their respective component municipalities or cities. Section 8 of the
‘same law further provided that all able-bodied citizens of the Philippines, who are at
least twelve (12) years of age, shall be required to plant one (1) tree every year.

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Notwithstanding the power given to LGUs to tax idle lands, available
Government Data showed that only the City of Marikina, among the Metropolitan
Manila Cities, imposed such tax which in turn allowed the city to generate a total
collection of Php 243.1 million from 2002 to 2009. Neither the enactment of R.A.
10176 improved the utilization of idle lands, considering that many Filipinos who
have the financial resources are acquiring lands or real estate, merely for investment
and not for a gainful endeavor that will make the land productive.

Consistent with the President's pronouncement to encourage land use and
development, as well as promote the people’s right to a balanced and healthful

ecology, it is hereby proposed that the pertinent provisions under the Local
Goverment Gade, pertaining to imposition of idle land tax be amended as proposed
under this Act.

In view of the foregoing, approval of this bill is earnestly sought

nowt P. SALO

KABAYAN Partylist

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. 6187

Introduced by Representative Ron P. Salo

AN ACT
AMENDING SECTIONS 236 AND 237 (A), (B), OF CHAPTER IV, TITLE |, BOOK
il, OF REPUBLIC ACT NO. 7160, OTHERWISE KNOWN AS THE LOCAL
GOVERNMENT CODE OF 1991

Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:

SEC. 1. Declaration of Policy — It is hereby declared the policy of the State
to:

(a) Ensure that lands are utilized efficiently according to their best use;

(b) To promote the full utilization of lands that will enhance the economic
activity within the locality;

(c) Encourage landowners to develop and maintain their properties to benefit
not only the owners, but the community in general;

(d) Discourage or to serve as disincentive to speculative acquisition of lands;

(e) To promote the autonomy of Local Government Units (LGUs) through the
power vested upon LGUs to create its own sources of revenues and to
levy taxes, fees and charges, subject to the limitations provided by law;
and

(f) Protect and advance the right of the people to a balanced and healthful
ecology in accord with the rhythm and harmony of nature, recognizing the
vital role of trees, as well as fruit and vegetable bearing crops in ecological
stability and food sustainability.

a

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SEC. 2. Section 236, Chapter Il, Title |, Book Il, of Republic Act No. 7160
is hereby amended to read as follows:

SEC. 236. Additional Ad Valorem Tax on Idle Lands. - A
province or city, or a municipality within the Metropolitan Manila Area,
may SHALL levy an annual tax on idle lands at the rate net-exceeding
OF five percent (5 %) of the assessed value of the property which shall
be in addition to the basic real property tax.

SEC. 3. Section 237 (A), (B), Chapter Il, Title |, Book II, of Republic Act
No. 7160 is hereby amended to read as follows:

SEC. 237. Idle Lands, Coverage. - For purposes of real property
taxation, idle lands shall include the following:

(a) Agricultural lands, moere-than-one-4)-hectare REGARDLESS
OF area, suitable for cultivation, dairying, inland fishery, and other
agricultural uses, one-half—(4/2)—ef which remain uncultivated or
unimproved by the owner of the property or person having legal
interest therein. Agricultural lands planted te-permanent-or-perennial
WITH VEGETABLE OR FRUIT BEARING CROPS OR with at least

TWO HUNDRED (200) trees to a hectare, OR A
PROPORTIONATE NUMBER OF TREES IF SUCH LAND IS EITHER
LESS THAN OR MORE ONE HECTARE, shall not be considered idle
lands. Lands actually used for grazing purposes shall likewise not be
considered idle lands.

(b) Lands, other than agricultural, located in a city or municipality,
more-than one-thousand(1.000) REGARDLESS OF area one-half
442}-6f which remain unutilized or unimproved by the owner of the
property or person having legal interest therein. HOWEVER, LANDS
PLANTED WITH AT LEAST ONE (1) TREE FOR EVERY FIFTY (50)
SQUARE METERS, OR AT LEAST FIFTY PERCENT (50%) OF THE
AREA IS PLANTED WITH VEGETABLE OR FRUIT BEARING
CROPS FOR A PERIOD OF AT LEAST SIX (6) MONTHS IN A
YEAR, SHALL NOT BE CONSIDERED IDLE LANDS.

(c) Regardless of land area, this Section shall likewise apply to
residential lots in subdivisions duly approved by proper authorities, the
ownership of which has been transferred to individual owners, who
shall be liable for the additional tax: Provided, however, that individual
lots of such subdivisions, the ownership of which has not been
transferred to the buyer shall be considered as part of the subdivision,
and shall be subject to the additional tax payable by subdivision owner
or operator... 7A

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SEC. 4. Repealing Clause. — all laws, decrees, executive orders, ordinances,
rules, regulations, or other issuances, or parts thereof which are inconsistent with
any of the provisions of this Act are hereby repealed, amended, and/or modified
accordingly.

SEC. 5. Implementing Rules and Regulations. - The Department of
Finance (DOF), Department of the Interior and Local Government (DILG),
Department of Agriculture (DA), and the Department of Environment and Natural
Resources (DENR), shall issue the Implementing Rules and Regulations (IRR) within
ninety (90) days from the effectivity of this Act.

SEC. 6. Effectivity. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in two (2) newspapers of general circulation.

Approved. au

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