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

Fifteen’ Congress
Second Regular Session

HOUSE BILLNO._5E88

Introduced by Honorable Roger G. Mereado

EXPLANATORY NOTE

‘This bill seeks to increase the tax on idle and unproductive lands, amending
for the purpose Section 236 of the Local Government Code.

Under Section 42 of Presidential Decree No. 464 entitled “ Enacting A Real
Property Tax Code (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 (2%) per annum based on the
prevailing assessed value of the property. The purpose of this is to provide the local
governments with adequate funds with which to underwrite basic and essential public
services. This was subsequently amended by P.D. No. 1446 (June 11, 1978) by
imposing and additional real property tax on idle lands at the rate of five percent (5%)
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
provides in Sec. 236 that local government units may levy an annual tax on idle ands
at the rate of five percent (5%) of the assessed value of the real property which shall
be in addition to the basic real property tax.

Despite these laws, it is lamentable to note that large tracts of privately-owned
lands have remained idle and undeveloped over the years. The above-mentioned laws
failed to effectively control the unjust and unproductive practice of rich individuals,
partnerships and corporations of acquiring vast tracts of lands for the purpose of
speculating for profit on the fusture increase in the market value of such Inds.


Landowners would rather let their lands remain idle than invest money for the
cultivation, utilization and development of these lands, 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.

Hence, this bill seeks to increase the ceiling tax on idle lands from five percent
(5%) to ten percent (10%). Its levy and collection shall be mandatory to be an
effective deterrent against the non-utilization of idle lands for productive purposes
and to further encourage local government units to maximize their revenue potentials.

In view of the foregoing considerations, approval of this bill is highly
recommended.

re,

Rt GAVIOLA MERCADO


Republic of the Philippines

HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Fifteenth Congress
Second Regular Session

HOUSE BILLNO. 5888

Introduced by Honorable Roger G. Mercado

AN ACT
INCREASING THE ADDITIONAL AD VALOREM TAX ON IDLE
LANDS, AMENDING FOR THE PURPOSE SECTION 236 OF
THE LOCAL GOVERNMENT CODE.

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

SECTION |. Section 236 of Republic Act No. 7160, otherwise known as the

Local Government Code of 1991, 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 and



COLLECT an annual tax on idle lands at the rate [not exceeding] OF [five percent
(5%)] TEN PERCENT (10%) of the assessed value of the property which shall be in

‘addtion to the basic real property tax.”
SECTION. 2, All laws, decrees, orders, rules, and regulations, issuances, or
parts thereof which are inconsistent with the provisions of this Act are hereby

repealed, amencled or modified accordingly.

SE

ION, 3. ‘This Act shall take effect afler fifteen (15) days following its

complete publication in at least two (2) national newspapers of general circulation

Approved,