THIRTEENTH CONGRESS OF THE REPUBLIC) 
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Third Regular Session 
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Introduced by Senator Manuel "Lito" M. Lapid 
EXPLANATORY NOTE 
The call to come-up with an efficient, fair and accurately assessed zonal 
valuation by the Bureau of Internal Revenue (BIR) is crucial to all taxpayers 
shelling out large amount of money to pay for Capital Gains and Real property 
Tax annually. 
The country's property market is at present characterized by multiple 
systems of valuation appraised by different government agencies causing 
perplexity in determining the real fair market value of any given real estate, In 
fact, there are reports coming from some Local Government Units concerning 
broad discrepancies in zonal valuation assessment in their localities conducted 
by the BIR and the Provincial and City Assessors, with the former always 
assessing higher most of the time. 
There are also cases of unwarranted increase in zonal valuation by the 
BIR in just a short span of time. Taking the experience of the Province of 
Pampanga, the valuation of commercial lots located along San Fernando- 
Olongapo Highway increased from P7,OOO per square meter to P40,OOO per 
square meter or a 470% increase from its previous assessment. 
Under the NIRC, the computation of the value of the property is based on 
the fair market value as determined by the Commissioner of BIR or the schedule 
of values of the Provincial I City Assessors, whichever is higher. As stated, the 
determination of value by the Commissioner is almost always higher than the 
schedule of values of the Provincial and City Assessors. 
This measure intends to remedy the situation where the discrepancy 
between the assessment of the BIR and the schedule of values of the Provincial 
and City Assessors is too big by mandating that the assessment of the fair 
market value shall be with the concurrence of the Provincial I City Assessors who 
prepare the assessment of real properties pursuant to the Local Government 
Code. Moreover, this measure will also expand the consultation process such 
that all stakeholders in the zonal valuation will have a chance to voice out their 
concerns. 
I call on my colleagues for the early passage of this earnest measure. 
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Senator 


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THIRTEENTH CONGRESS OF THE REPUBLIC) 
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OF THE PHILIPPINES 
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Third Regular Session 
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Introduced by Senator Manuel "Lito" M. Lapid 
AN ACT 
LIMITING THE AUTHORITY GIVEN TO THE COMMISSIONER OF THE 
BUREAU OF INTERNAL REVENUE (BIR) AND ENCOURAGE ACTIVE 
PARTICIPATION OF STAKEHOLDERS IN PRESCRIBING REAL PROPERTY 
VALUES, AMENDING FOR THE PURPOSE CERTAIN PROVISIONS OF 
REPUBLIC ACT NO. 8424 OTHERWISE KNOWN AS THE "NATIONAL 
INTERNAL REVENUE CODE OF THE PHILIPPINES", AND FOR OTHER 
PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION. 1. -Title I, Sec. 6 (E) of RA 8424 is hereby amended to read 
as follows: 
"Sec. 6. - Power of the Commissioner to Make assessments and 
Prescribe additional Requirements for Tax Administration and Enforcement. - 
(A) Examination of Returns and Determination of Tax Due.- X X X  
(13) Failure to Submit Required Returns, Statements, Reports and other 
Documents.- X X X  
(C) Authority to Conduct Inventotytaking, sutveillance and to Prescribe 
Presumptive Gross Sales Receipts.- X X X 
(0) Authority to Terminate Taxable Period.- X X X 
(E) Authority of the Commissioner to Prescribe Real Property Values. - 
The Commissioner is hereby authorized to divide the Philippines into 
different zones or areas and shall, upon consultation with competent 
appraisers both from the private and public sectors, BUSINESS 
SECTOR, AFFECTED HOMEOWNERS ASSOCIATION AND IN 
CLOSE COORDINATION WITH THE PROVINCIAL AND CITY 


ASSESSOR, 
determine the fair market value of real properties 
located in each zone or area. For purposes of computing any internal 
revenue tax, the value of the property shall be THE FAIR MARKET 
VALUE AS DETERMINED BY THE COMMISSIONER WITH THE 
CONCURRENCE OF THE PROVINCIAL AND CITY ASSESSORS IN 
CONSIDERATION OF THEIR SET SCHEDULE OF VALUES. I; 
whichever is the higher of: 
(I) the fair market value as determined by the Commissioner, or 
(2) the fair market value as shown in the schedule of values of the 
Provincial and City Assessors.] 
(F) Authority of the Commissioner to inquire into, Bank Deposit Accounts.- 
x x x  
(G) Authority to Accredit and Register Tax Agents.- X X X  
(H) Authority of the Commissioner to Prescribe Additional Procedural or 
Documentary Requirements- X X X  
SEC. 2. Repealing Clquse. - All laws, Presidential Decrees, Issuances, 
Executive Orders, Letters of Instruction, rules or regulations inconsistent with the 
provision of this Act are hereby repealed or modified accordingly. 
SEC. 3. Effectivity Clause. - This Act shall take effect fifteen (15) days 
from the date of its publication in at least two (2) newspapers of general 
circulation. 
Approved,