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

13" CONGRESS

First Regular Session

HOUSE BILL NO. 278

Introduced by HON. JOSE C. DE VENECIA
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Explanatory Note

Real property tax (RPT) is the single major source of income of local governments. It
accounts for roughly 36% of total locally-generated income of LGUs. However, the Commission
on Audit (COA) bared that only 54% of the total potential tax take are actually collected. There
ate several reasons raised why there is an apparent under collection of real property taxes:

(1) There is no uniform method of appraising real properties among local
governments—ie., two similar assets located in two different but adjacent
jurisdictions may bear different RPT burdens.

2) Revision or updating of the schedule of fair market values is so infrequent, thus,
resulting in a low tax base even as assets in the market continue to appreciate.

@) The approval of the schedule of fair market values is vested on the Sanggunian
Panlalawigan/Panlungsod. Considering the political nature of the local Sanggunian,
the tendency is to forego revisions in the valuation schedule of to keep the property
values understated.

It is important, therefore, that the approval of the schedule of fair market values be
transferred from the local Sanggunian to the Department of Finance (DOF) upon review and
recommendation of a Regional Technical Valuation Committee. The power to determine the
assessment levels and tax rates, however, shall remain with the local Sanggunian.

The Committee shall be composed of the local assessors, and regional representatives
from the Bureau of Local Government Finance (BLGF), the Bureau of Internal Revenue (BIR),
and the private sector. The same Committee will seek to harmonize the valuation method used
by the different local government units, national government agencies, and the ptivate sector.

In view of the foregoing, approval of this bill is earnestly urged.

SE C. DE VENECIA



lic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila
13" CONGRESS

First Regular Session

HOUSE BILENO. __ 278

Introduced by HON. JOSE C. DE VENECIA

AN ACT AMENDING SECTIONS 212 AND 214 OF REPUBLIC ACT 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:

SEC. 1, Section 212 of the Local Government Code of 1991 is hereby amended to read
as follow:

212. Preparation of Schedule of Fair Market Values. — Before any general
revision of property assessment is made pursuant to the provisions of this ‘Tide, {there
shall be prepared a schedule of fair masket values by the provincial, city and the municipal
assessors of the municipalities within the Metropolitan Manila Area for the different
classes of real property situated in their respective local government units for enactment
by ordinance of the sanggunian concerned] A SCHEDULE OF FAIR MARKET
VALUES SHALL BE PREPARED BY A REGIONAL TEC VALUNTION
COMMITTEE FOR FINAL APPROVAL OF THE SECRETARY OF FINANC

THE REGIONAL ‘TECHNICAL VALUATION COMMIT SHALL. BE,

COMPOSED OF THE PROVINCIAL, CITY AND MUNICIPAL ASSESSORS OF
MUNICIPALITIES WITHIN THE METROPOLITAN MANILA AREA, AND ONE:
SH FROM THE BUREAU OF LOCAL GOVERNMENT

INTERNAL REVI (BIR), AND THE

‘ROM ‘THE PRIVS HECTOR MUST

BE DIRECTLY INVOLVED IN REAL ESTATE APPRAISAL.

SEC
as follows:

Section 214 of the Local Government Code of 1991 is hereby amended to read

SEC. 214. Amendment of Schedule of Fair Market Vabues, - “The {provincial, city ot
municipal assessor] REGIONAL TECHNICAL VALUATION COMMITTEE. may
recommend to the {sanggunian] SECRETARY OF FINANCE concerned amendments
to correct errors in valuation in the schedule of fair market values. ‘The [sanggunian|



SECRETARY concemed shall, [by otdinance,] act upon the recommendation within
ninety (90) days from receipt thereof.

SEC. 3. Effectivity, - This Act shall take effect fifteen (15) days following its publication
in two (2) newspapers of general cisculation,

APPROVED,