Ce diaporama a bien été signalé.
Le téléchargement de votre SlideShare est en cours. ×

Real Property Tax Valuation of Local Government Units A Tool to Improve Tax Collection System

Publicité
Publicité
Publicité
Publicité
Publicité
Publicité
Publicité
Publicité
Publicité
Publicité
Publicité
Publicité
Chargement dans…3
×

Consultez-les par la suite

1 sur 26 Publicité
Publicité

Plus De Contenu Connexe

Plus par Jo Balucanag - Bitonio (20)

Plus récents (20)

Publicité

Real Property Tax Valuation of Local Government Units A Tool to Improve Tax Collection System

  1. 1. Real Property Tax Valuation of Local Government Units A Tool to Improve Tax Collection System Ardel C. Laroya, REA ,REB, EnP, DPA Josefina B. Bitonio, DPA Presenter Adviser Paper Presented at Mahidol University 999 Phuttamonthon 4 Road, Salaya, Nakhon Pathom 73170
  2. 2. Rationale The Local Government of the Philippines is conferred with the power to create its revenue resources subject to limitations set by law. Section 129 of the LGC of 1991 states that “Each local government unit shall exercise its power to create its sources of revenue and to levy taxes, fees, and charges subject to the provisions herein, consistent with the basic policy of local autonomy. Such taxes, fees, and charges shall accrue exclusively to the local government units.” (Republic of the Philippines, 1991).
  3. 3. • The local assessor prepares the assessment that contains the list of all the properties in the LGU and their present market value. Property values are based on the schedule that the assessor provides for different classes of properties. The process ideally should be guided by principles of equity and uniformity. It must be the provincial legislative council that then enacts the schedule of values into an ordinance, however, the practice differs in this respect. The provinces establish both valuations and rates, and the provincial legislatures determine revaluations (Real Property Taxation in the Philippines, n.d.) Rationale
  4. 4. Objectives of the study 1. Determine the profiles of the city and municipal government units in terms of classification, and human resource involved on the valuation, assessment and collection of real property tax. 2. Identify the method and mode of valuation/ assessment being used by the LGUs. 3. Determine if there is a significant relationship between the LGU profile and their method and mode of valuation/assessment. 4. Present the LGUs real property tax target, collection, and percentage of collection for F.Y. 2019-2021. 5. Determine the significant relationship between the LGU's real property method and mode of valuation/assessment, and their real property tax collections. 6. Identify the major concerns on real property tax valuation/assessment that the LGUs are facing in their respective jurisdiction. 7. Create a policy brief based on the results of the study.
  5. 5. Research Paradigm • Municipality/ City Classification • Human Resource involved in the valuation/ assessment and collection Profile of the Municipal/ City Government in Pangasinan • Manual • Online • Both Method and Mode of Valuation/ Assessment • Profile •Method and Mode of Valuation/ Assessment •RPT Collection Significant relationship • Target • Actual Collections • Percentage of Collection Real Property Tax Collections (2019-2021) • Accuracy • Method of valuation and assessment • Effective statutory rate • Behavior of the Property Tax Collectors/ Taxpayers • Level of awareness by property owners Challenges and major concerns • Policy recommend ation in the form of a POLICY BRIEF maybe crafted and forwarded to the policy makers of the Local Government Units POLICY BRIEF
  6. 6. Theoretical Framework a. Annual (or rental) value system - The rationale for utilizing this system is that taxes are paid based on income rather than means. b. Capital Value System - This system is a common valuation method used in most countries including the Philippines because it offers more transparency than the annual value system. c. Site (or land) value system - The last form of property taxation is proposed in 1879 by Henry George and is considered a special case of market value taxation where the property tax applies to the market value of bare land only.
  7. 7. • To further strengthen the framework of this study, the researcher also considered the Comprehensive Tax Reform Program (CTRP) in line with the Capital Value System followed by the Philippines. • The Comprehensive Tax Reform Program (CTRP) aims to promote the development of a just, equitable, and efficient real property valuation system. It will broaden the tax base used for property and property- related taxes of the national and local governments, improving tax collections without increasing the existing tax rates or imposing new taxes. Theoretical Framework
  8. 8. Conceptual Framework If the Local Government Unit utilizes the proper valuation/ assessment methods and has a minimal challenges and concerns, then the LGU are implementing the laws and rules and regulations effectively. If the Local Government Unit does not utilize the proper valuation/ assessment methods and encountered major challenges and concerns, then the LGU needs to improve their process to achieve its goal to increase its revenues through real property taxes. Valuation/ Assessment Methods Challenges and major concerns The power of taxation is an inherent attribute of sovereignty to impose burdens upon persons, property, or rights within its jurisdiction to raise revenues to defray the legitimate expenditures of the government. As inherent, the power of taxation is present from the moment a state exists. Without taxes, the state cannot exist that is why they are called the lifeblood of the government (Capuno, 2020).
  9. 9. METHODOLOGY • This study utilized a Descriptive Correlational Research. It explores phenomena in real life situations and uses a survey method such as use of questionnaire‚ interview‚ and observation, aimed to provide a quantitative or numeric description of trends of a population. It values statistical descriptions and precise measurements. • According to Creswell (2008), correlational research designs are used by investigators to describe and measure the degree of relationship between two or more variables or sets of scores. • This study entailed the participation of the Local Chief Executive, the municipal assessors and treasurers who are primarily involved in the process and system of real property taxation in the three (3) Cities, and forty-four (44) 1st, 2nd, 3rd 4th, and 5th class municipalities in Pangasinan.
  10. 10. City and Municipal Government Units Frequ ency Percent Component City 3 6.3 First Class Municipality 19 40.6 Second Class Municipality 3 6.3 Third Class Municipality 13 27.7 Fourth Class Municipality 8 17.0 Fifth Class Municipality 1 2.1 Total 47 100 Results and Discussions SOP No. 1A Classification of the Cities and Municipalities
  11. 11. SOP No. 1B Human Resources Involved in the Assessment and Collections of Real Property Tax Human Resources Freque ncy Percentage 5-10 employees 26 55.3 11-20 employees 17 36.2 More than 20 4 8.5 Total 47 100
  12. 12. SOP No. 2A Valuation/Assessment Method Method Number of LGUs Implemented Percent age Real properties are appraised at their current and fair market value by the assessor 45 95.7 Real properties are appraised at their current and fair market value by the real property owner 39 82.9 Real properties are classified for assessment purposes based on their actual use 47 100 Real properties are assessed based on a uniform classification within each LGU 44 93.6 The appraisal, assessment, levy, and collection of RPT do not depend on any private person 47 100 The appraisal and assessment of real property are equitable 47 100
  13. 13. SOP No. 2B Mode of Valuation and Assessment Mode of Valuation and Assessment Freque ncy Percentage Manual 40 85.1 Online 2 4.3 Both 5 10.6 Total 47 100
  14. 14. SOP No. 3 Significant relationship between the LGU’s Profile and their Method and Mode of Valuation/Assessment Indicators of the Valuation/ Assessment Methods Manual Online Both TOTAL Real properties are appraised at their current and fair market value by the assessor 45 45 Real properties are appraised at their current and fair market value by the real property owner 39 39 Real properties are classified for assessment purposes based on their actual use 42 2 3 47 Real properties are assessed based on a uniform classification within each LGU 44 44 The appraisal, assessment, levy, and collection of RPT do not depend on any private person 47 47 The appraisal and assessment of real property are equitable 45 2 47
  15. 15. SOP No. 4 Significant relationship between LGU Classification and Actual RPT Collection Crosstab 2019 Target Collection Total Below Average Above Average Class Component Cities 0 3 (100%) 3 First Class 12 7 (36.8%) 19 Second Class 1 2 (66.7%) 3 Third Class 12 1 (7.7%) 13 Fourth Class 8 0 8 Fifth Class 1 0 1 Total 34 13 (27.7%) 47
  16. 16. SOP No. 5 Significant relationship between the LGU’s Profile and Mode of Assessment and Collection Crosstab 2019 Target Collection Total Below Average Above Average Mode of Assessment and Collection Manual 32 8 (25%) 40 Online 0 2 (100%) 2 Both 2 3 (60%) 5 Total 34 13 47
  17. 17. SOP No. 6A Major Concerns on Valuation Method Accuracy Mean Descriptive Rating* Time lag in the property valuation process affects tax collectors’ works 3.31 Serious Delay in payment of property tax 3.69 Very Serious Taxpayers do not know when, where, and how to pay their taxes. 2.35 Moderately Serious The LGU takes so long to value due to a lack of enough equipment to perform valuation in time and funds from property tax collection are sometimes used to do other development activities 2.33 Moderately Serious Some residents are willing to pay tax on time but a deficiency in the system discourages them 1.63 Moderately Serious Residents do not get bills from the LGU in time and so settlement by the customer will be late. 1.38 Not Serious Overall 2.45 Moderately Serious
  18. 18. SOP No. 6B Major Concerns on Mode of Valuation/Assessment Efficiency Mean Descriptive Rating* Different methods of determining the tax base 1.75 Moderately Serious Inadequacy in property tax administration 1.56 Moderately Serious Lack of sufficient financial resources and enough valuers to perform valuation 2.56 Serious No ongoing identification of new properties not in the roll and valuing of those that have undergone changes 2.23 Moderately Serious Many valuable properties are not taxed at all 2.04 Moderately Serious Valuation is a one-time process 3.4 Serious Many newly refurbished buildings have not been re- valued 2.25 Moderately Serious Overall 2.26 Moderately Serious
  19. 19. SOP No. 6C Major Concerns on Effective Statutory Rate Effectiveness Mean Descriptive Rating* Lack of effective statutory rate 2.04 Moderately Serious Inconsistency in the valuation process 3.29 Serious The LGU authorities tend to set tax rates that are unrealistically low or high and have little regard for the actual cost of valuation and other areas of administration. 2.29 Moderately Serious Inadequate funds to survey and identify new properties that are not valued and those improved remains to be a problem in keeping the property database up to date. 1.58 Moderately Serious Inadequate land information for property taxation 1.81 Moderately Serious Overall 1.84 Moderately Serious
  20. 20. SOP No. 6D Major Concerns on Human Resources Involved A. Behavior of Tax Collectors Mean Descriptive Rating* The property tax collectors are subjected to corrupt behavior 1.67 Moderately Serious Skilled technical staff needed to organize and supervise valuation work are in short supply 2.52 Moderately Serious Inadequate follow-up due to the low number of staff 2.60 Serious Inequitable property taxation due to taxing only the identified properties spotted in the valuation procedure 2.35 Moderately Serious Intervention from politicians 2.54 Serious B. Behavior of Taxpayers Taxpayers do not feel that they are being treated fairly 1.73 Moderately Serious There is that mistrust attitude of taxpayers to property tax system because of unawareness of what is done to arrive at the figure they pay 2.83 Serious Overall 2.32 Moderately Serious
  21. 21. SOP No. 6E Major Concerns on Property Owners’ Awareness of Real Property Tax Valuation and Assessment Systems Awareness of the Taxpayers Mean Descriptive Rating* Taxpayers;’ Lack of awareness 2.23 Moderately Serious Taxpayers do not know how the property tax is calculated 2.52 Moderately Serious Taxpayers do not see the connection between taxes paid and community improvement 2.29 Moderately Serious No transparency on the use of property tax 2.29 Moderately Serious Taxpayers unwilling to pay 2.42 Moderately Serious Many citizens are unaware of their legal rights and duties as taxpayers. 2.96 Serious No awareness campaigns to educate taxpayers on their rights to services from their LGU in return for tax collection. 2.02 Moderately Serious Overall 2.39 Moderately Serious
  22. 22. CONCLUSION Based on the findings, the following conclusions are drawn: 1. Real property taxes are assessed and collected by the cities and municipalities through several means - manual, online or both manual and online mode. Those LGUs who used online mode collected more than the average target. Overall, manual, online, and both users ensure that all the means of assessment and collection are carried out and taken place. 2. More than half of the respondents have five to ten employees - minimum requirement, in their assessment and collecting office, that resulted to inadequate staff to follow-up delinquent taxpayers . 3. Challenges and concerns in the real property tax collection include the area of accuracy, efficiency, effectiveness, behavior, and level of awareness. This means that the policymakers need to concentrate on these aspects to eliminate the problems toward a loop-hole-free implementation of tax valuation, assessment, and collection.
  23. 23. RECOMMENDATIONS Based on the conclusions, the following points are recommended: 1. The researcher recommends other researchers to conduct a qualitative study on the subject of this research to know the stories behind the challenges faced by tax collectors and taxpayers. This will also support the results of this study. 2. The researcher also recommends other researchers to conduct further studies in other provinces and LGUs to have a comparison if they also experience the same challenges or other researchers can also look at the best practices of other assessors’ offices on real property tax collection. 3. The researcher included the following recommendations for the policymakers incorporated in the policy brief as an output of this study: a. Delay in payment of property tax – the policymakers must strengthen the administration of penalties imposed for failure to pay the tax in the Philippines. Policymakers must revisit or develop the existing administrative policies such as Section 254 of Republic Act No. 7160 of the LGC.
  24. 24. RECOMMENDATIONS b. Valuation is a one-time process – Policymakers must provide a more thorough process in property valuation that will ensure fairness, accountability, and transparency. c. Inconsistency in the valuation process – There is a need for policies that require more consistency. The policymakers must design and pass laws characterized by equity and uniformity. d. Inadequate follow-up due to the low number of staff – City/municipal assessor’s office must be advised to increase the number of experienced and qualified employees in their office to ease the burden of the currently employed staff. e. Many citizens are unaware of their legal rights and duties as taxpayers – Policy makers must conduct seminars or campaigns on how to raise awareness of the taxpayers' legal rights and duties. They can also create social media ads and campaigns that will briefly educate the taxpayers.
  25. 25. PROPOSED POLICY BRIEF ON REAL PROPERTY TAX VALUATION FOR LOCAL GOVERNMENT UNITS tool
  26. 26. THANK YOU.

×