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EIGHTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES)
First Regular Session )

HOUSE OF REPRESENTATIVES

House Bill No.0127

Introduced by Representative Victor A. Yap

EXPLANATORY NOTE

According to the World Bank in 2016, the Philippines has about 41.72 % of the
country’s total land area devoted to agriculture, roughly 13 million hectares out of the
declared 14.2 million hectares of alienable and disposable lands.‘ However, unutilized
areas from this huge portion of land are also considerable, with some estimates
reaching up to 375,000 hectares of idle lands.*

‘An idle-Jand tax is an ad valorem tax levied annually on the assessed value of a
real property that remains uncultivated and unimproved by a property owner. The status
quo of five petcent (5%) tax on the assessed value of the property holds relatively
minimal tax burden on idle lands in the country. The law was supposed to be a
regulatory measure that discourages real properties remaining undeveloped. Instead, the
government is left with unproductive private lands which stunt the country’s potential
for growth.

Furthermore, this type of tax was also meant to provide additional revenue for
the local eet ee units (LGUs). As an example, Marikina City posted a total
collection of P243.1 million from 2002 to 2009 from idle land tax. However, this
incentive may) still be considered weak as evidenced by the lack of active
implementation of the tax measure among the rest of the other LGUs.*

Therefore, this bill secks to amend Section 236 of Republic Act No. 7160 by
increasing the ceiling on the additional ad valorem tax on idle lands from five percent
(5%) to ten percent (10%). Increasing the rate aims to further incentivize real property
owners to put these idle lands into productive use in order to spur private owners to
contribute to the national economy, and secondarily to serve as better sources of
revenue for the government.

VICTOR A.YAP
Representative, 2™ District of Tarlac

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* CPBRD Policy Brief No. 2016- 02



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EIGHTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES — )
First Regular Session )

HOUSE OF REPRESENTATIVES

House Bill No.6127

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Introduced by Representative Victor A. Yap

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| AN ACT

INCREASING THE TAX ON IDLE LANDS, AMENDING FOR THE PURPOSE

SECTION OF REPUBLIC ACT NO. 7160, OTHERWISE KNOWN AS THE

LOCAL GOVERNMENT CODE OF 1991

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

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SECTION 1. Section 236 of Republic Act No. 7160 is hereby amended as
follows:

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“SEC. 236. Additional Ad Valorem Tax on Idle Lands-Aprovince or
city, of a municipality within Metropolitan Manila, may levy an annual tax on idle
lands at the rate not exceeding [five (5)] TEN (10%) percent of the assessed
value of the property which shall be in addition to the basic real property tax.”

SEC. 2, Repealing Clause. ~ All laws, executive orders, executive issuances or
letters of instructions, or any part thereof, inconsistent with or contrary to the provisions
of this Act, are hereby repealed, amended, or modified accordingly.

SEC. 3. Effectivity. — This Act shall take effect immediately after its publication
in at least two (2) newspapers of general circulation.

Approved,