Start Date
23-11-1988 12:30 PM
End Date
23-11-1988 2:30 PM
Description
Real property taxation in the Philippines began with the American regime in 1901. There were several important amendments to the Property Tax Act in 1916. These amendments created the position of Provincial Assessor and removed assessment responsibilities from the Treasurer, who was left with only collection responsibilities. Although the law called for updating assessments every three years, assessors found that this task was made difficult because of the opposition of influential property owners within their communities. The declaration of marshall law in the Philippines in 1972 brought out sweeping reforms that, among other things, compelled property owners to declare the true values of their properties for tax purposes. The first mass appraisal and reassessment of all taxable and exempt real properties was conducted nationwide in 1973. This resulted in valuation increases ranging from 200% to 500%. A presidential decree in 1974 established sweeping changes in the property tax structure. The decree called for six fundamental principles on appraisal and assessment. Current market value became the basis for assessments and real property was classified on the basis of actual use. The code called for uniformity within local political subdivisions and required a uniform standard of value within each subdivision. It also prohibited the use of private parties to administer or collect real property taxes. The stated goal was an equitable distribution of tax burdens. In 1979, the Department of Finance launched a broad and comprehensive real property tax administration program. This program called for improved tax mapping, improved appraisal/assessment practices, improved record management, and an overhaul of tax collections. The classification system called for assessment ratios running from 15% of market value for land used for recreational, educational, and hospital purposes to 50% for land used for mining, industrial, or commercial purposes. Land used for residential purposes was assessed at 30% of market value. There was a similar classification system for buildings and other improvements, with assessment ratios running from 15% to 80%, depending upon the value and the use of the structure. Residential properties with a value of iess than 30,000 pesos was assessed at 15%, while residential property with a value of more than 500,000 pesos was assessed at 80% of market value. After nearly 90 years of work, the property tax in the Philippines is still in need of substantial improvement. Delinquency runs into the hundreds of millions of pesos and the treasurers who are charged by law to auction off property to satisfy tax liens seldom carry out their duties in this area. Tax consciousness is a fundamental requirement for any progress in the property tax field. The Philippine people must be motivated to face up to their responsibilities to support the cost of essential government services at the local level. The present generation of Filipinos is well educated and there is every indication that, with some help from developed countries, the property tax could make local government units self-reliant.
Publication Date
November 1988
Recommended Citation
Baraquero, Oscar R., "The administration of real property for taxation purposes in the Philippines" (1988). International Research Symposium. 6.
https://researchexchange.iaao.org/irs/irs88/sessions/6
The administration of real property for taxation purposes in the Philippines
Real property taxation in the Philippines began with the American regime in 1901. There were several important amendments to the Property Tax Act in 1916. These amendments created the position of Provincial Assessor and removed assessment responsibilities from the Treasurer, who was left with only collection responsibilities. Although the law called for updating assessments every three years, assessors found that this task was made difficult because of the opposition of influential property owners within their communities. The declaration of marshall law in the Philippines in 1972 brought out sweeping reforms that, among other things, compelled property owners to declare the true values of their properties for tax purposes. The first mass appraisal and reassessment of all taxable and exempt real properties was conducted nationwide in 1973. This resulted in valuation increases ranging from 200% to 500%. A presidential decree in 1974 established sweeping changes in the property tax structure. The decree called for six fundamental principles on appraisal and assessment. Current market value became the basis for assessments and real property was classified on the basis of actual use. The code called for uniformity within local political subdivisions and required a uniform standard of value within each subdivision. It also prohibited the use of private parties to administer or collect real property taxes. The stated goal was an equitable distribution of tax burdens. In 1979, the Department of Finance launched a broad and comprehensive real property tax administration program. This program called for improved tax mapping, improved appraisal/assessment practices, improved record management, and an overhaul of tax collections. The classification system called for assessment ratios running from 15% of market value for land used for recreational, educational, and hospital purposes to 50% for land used for mining, industrial, or commercial purposes. Land used for residential purposes was assessed at 30% of market value. There was a similar classification system for buildings and other improvements, with assessment ratios running from 15% to 80%, depending upon the value and the use of the structure. Residential properties with a value of iess than 30,000 pesos was assessed at 15%, while residential property with a value of more than 500,000 pesos was assessed at 80% of market value. After nearly 90 years of work, the property tax in the Philippines is still in need of substantial improvement. Delinquency runs into the hundreds of millions of pesos and the treasurers who are charged by law to auction off property to satisfy tax liens seldom carry out their duties in this area. Tax consciousness is a fundamental requirement for any progress in the property tax field. The Philippine people must be motivated to face up to their responsibilities to support the cost of essential government services at the local level. The present generation of Filipinos is well educated and there is every indication that, with some help from developed countries, the property tax could make local government units self-reliant.