LAND GOVERNANCE ASSESSMENT
FRAMEWORK IN THE PHILIPPINES
THEMATIC AREA 2. LAND USE PLANNING, MANAGEMENT AND
TAXATION
June 2013
Theme 2: Land Use Planning,
Management and Taxation
LGI-7: Transparency of
land use restrictions
•Public input on urban land use plan changes
•Public input on rural land use plan changes
•Value capture by public from land use changes
•Speed of land use change
LGI-8: Efficiency of land
use planning
•Urban development in largest city
•Urban development in 3 next largest cities
•Ability to cope with urban growth
•Plot size adherence
•Planned use aligned to actual
LGI-9: Speed and predictability
of enforcement of restricted
land uses
•Building requirements are realistic
•Issuance of building permits
LGI-10: Transparency of
valuations •Transparent valuation
•Valuation rolls are available
LGI-11: Tax collection efficiency •Exemptions are justified
•Tax roll is comprehensive
•Assessed taxes are collected
•Property taxes greater than cost
Dimensions
Indicators
LGI-7. Transparency of land use
restrictions
This indicator assesses the extent to which land use and
management regulations are justified and transparent.
LGI-7 Dimension (i) - Urban Land Use Plans, Changes and Public Input
Assessment
A – Public input is sought in preparing and amending land use plans and the public responses are explicitly referenced in the report prepared by the public body responsible for preparing the new public plans. This report is publicly accessible.
B – Public input is sought in preparing and amending land use plans and the public responses are used by the public body responsible for finalizing the new public plans, but the process for doing this is unclear or the report is not publicly accessible.
C – Public input is sought in preparing and amending land use plans but the public comments are largely ignored in the finalization of the land use plans.
D – Public input is not sought in preparing and amending land use plans.
Findings
Public consultation to solicit inputs in planning or plan revision is a
requirement in government-issued planning guidelines, but the manner of compliance varies widely across LGUs.
One approach which is rather exceptional is that of Naga City wherein participation was sought in every step of the CLUP formulation process.
Quite a few others embedded participation in the process through the multi-stakeholder composition of the working committees that were involved in preparing the plan.
In the majority of cases public consultation is conducted when the draft plan is already prepared usually by hired preparers.
Due to the lack of consistency in the practice the panel gave this dimension a rating of “B”.
Recommendations
Include meaningful public participation as one of the
governance indicators to ensure greater LGU compliance.
DILG and HLURB should extend technical assistance and
capability building programs to LGUs to enable them to
regularly update their plans in a participatory way.
Include relevant LGAF dimensions in monitoring land
governance at the LGU level.
LGI-7 Dimension (ii) - In rural areas, land use
plans and changes in these plans are based on
public input Assessment
A – Public input is sought in preparing and amending land use plans and the public responses are explicitly referenced in the report prepared by the public body responsible for preparing the new public plans. This report is publicly accessible.
B – Public input is sought in preparing and amending land use plans and the public responses are used by the public body responsible for finalizing the new public plans, but the process for doing this is unclear or the report is not publicly accessible.
C – Public input is sought in preparing and amending land use plans but the public comments are largely ignored in the finalization of the land use plans.
D – Public input is not sought in preparing and amending land use plans.
Findings Four major activities are cited as examples of land use planning in the rural areas: basic
land classification, forest land use planning, delineation of ancestral domains, and establishment of protected areas. Each of these processes entails varying degrees of public input.
Land classification determines the final forest boundaries as well as which part of the territory will be released for titling. A highly technical process, it requires little public input. When demarcating boundaries on the ground affected communities and LGUs are consulted
Forest land use planning is undertaken by LGUs and extensive consultations with upland dwellers. The resulting co-management arrangement further provides opportunities for public participation in forest management.
Ancestral domains are self-delineated by the particular ethnic community with technical inputs from government and NGO representatives.
Establishment of protected areas follows a 13-step process stipulated in the NIPAS Act. Little participation is needed in the technical assessment and delineation but extensive consultations are required in the planning and management of the established protected area.
The panel rated this dimension “B”.
Recommendations
Public participation in technical processes of boundary
delineations should be minimized to avoid chaos.
Extensive participation should be the norm when it comes
to planning for and determining the uses of areas
according to their legal status.
LGI 7 Dimension (iii) Public Benefits
from Changes in Permitted Land Use Assesses existence and transparency of mechanisms to allow the public to
capture significant part of the gains from changing land use.
Assessment
A – Mechanisms to allow the public to capture significant share of the gains
from changing land use are regularly used and applied transparently based
on clear regulation.
B – Mechanisms to allow the public to capture significant share of the gains
from changing land use are applied transparently but not always used.
C – Mechanisms to allow the public to capture significant share of the
gains from changing land use are rarely used or applied in a
discretionary manner.
D – Mechanisms to allow the public to capture significant share of the gains
from changing land use are not used or not applied transparently.
Findings The twin principle of worsement compensation and betterment levy is not
adopted in full in the Philippines.
On the issue of worsement compensation government performance record is pockmarked with backlogs in ROW payments and many properties affected by expropriation are not compensated fairly.
On the matter of betterment levy, both national and local governments have not availed of their opportunity to finance up to 60% of the cost of their projects from special assessments as authorized by law (CA 470, PD 464, RA 7160). Default by the government has emboldened vested interests to unduly influence the location of government projects for their own benefit.
The practice by some property owners to donate a portion of their land for use by government projects in anticipation of future windfall benefits serves as a “de facto” application of the betterment levy. But the act of donating is highly discretionary and binds the donee to eternal debt of gratitude.
In view of these observations the panel has rated this dimension “C”.
Recommendations
Government should implement the provisions of Sec.
240-245 of the Local Government Code regarding the
imposition of special benefit assessments. The BLGF can
assist by conducting pilot studies and developing specific
guidelines and providing appropriate training for local
Assessors.
LGI 7 Dimension (iv) - Speed of Land
Use Change Assesses whether majority of land where land use has changed is transferred to its destined use within a period of 3 years.
Assessment
A – More than 70% of the land that has had a change in land use assignment in the past 3 years has changed to the destined use.
B – Between 50% and 70% of the land that has had a change in land use assignment in the past 3 years has changed to the destined use.
C – Between 30% and 50% of the land that has had a change in land use assignment in the past 3 years has changed to the destined use.
D – Less than 30% of the land that has had a change in land use assignment in the past 3 years has changed to the destined use.
Findings
No systematic monitoring of land use change is undertaken in the Philippines,
hence, the difficulty of determining the rate of change.
It can be assumed that the speed of land use change is directly related to the rate
of urbanization, therefore it can be assumed that it is highest in Metro Manila
and environs.
Such changes are influenced largely by national government investments in road
construction and by private investments, big and small.
Local governments, on whose shoulders land use regulation falls,
tend to be passive onlookers rather than proactively determining the direction
and pace of development through their land use plans. Unplanned development
also results in inefficiencies in land use allocation.
Accordingly, the panel gave this dimension a rating of “C”.
Recommendations
LGUs should be more proactive in urban planning,
making sound projections on directions, scope and extent
of urban growth so that services and infrastructures can be
projected in advance.
Observe consistency of plans across LGU boundaries and
within provinces and economic regions through a
hierarchy of land use policies to better guide local
governments.
Enact the National Land Use Act.
Theme 2: Land Use Planning,
Management and Taxation
LGI-7: Transparency of
land use restrictions
•Public input on urban land use plan changes
•Public input on rural land use plan changes
•Value capture by public from land use changes
•Speed of land use change
LGI-8: Efficiency of land
use planning
•Urban development in largest city
•Urban development in 3 next largest cities
•Ability to cope with urban growth
•Plot size adherence
•Planned use aligned to actual
LGI-9: Speed and predictability
of enforcement of restricted
land uses
•Building requirements are realistic
•Issuance of building permits
LGI-10: Transparency of
valuations •Transparent valuation
•Valuation rolls are available
LGI-11: Tax collection efficiency •Exemptions are justified
•Tax roll is comprehensive
•Assessed taxes are collected
•Property taxes greater than cost
Dimensions
Indicators
LGI-8. Efficiency in the land use planning
process
This indicator assesses the adequacy of land use plans and
regulations.
LGI 8 Dimension (i) - Control of Urban Spatial Expansion in the Largest City A process for planned urban development is followed in practice in the largest city in the country.
Assessment
A – In the largest city in the country urban spatial expansion is controlled effectively by a hierarchy of regional/detailed land use plans that are kept up-to-date.
B – In the largest city in the country, while a hierarchy of regional/detailed land use plans is specified by law, in practice urban spatial expansion is guided by the provision of infrastructure without full implementation of the land use plans.
C – In the largest city in the country, while a hierarchy of regional/detailed land use plans is specified by law, in practice urban spatial expansion occurs in an ad hoc manner with infrastructure provided some time after urbanization.
D – In the largest city in the country a hierarchy of regional/detailed land use plans may or may not be specified by law and in practice urban spatial expansion occurs in an ad hoc manner with little if any infrastructure provided in most newly developing areas.
Findings The largest city in terms of population is Quezon City.
The physical development and spatial expansion of QC can be divided into two phases: QC as a planned national capital and QC as an ordinary suburb of Manila.
During the first phase QC benefited from technical planning services of the national government and the city‟s physical development was effectively controlled.
During the second phase QC reverted to an ordinary city. It lost the national government support services and failed to control its urban expansion and growth.
Failing to link up its efforts with the national government investments in radial and circumferential arterials that triggered the suburban expansion of Manila, QC‟s later development exhibited an ad hoc unplanned character.
Based on these observations the panel‟s rating for this dimension is “C”.
Recommendations
The current effort of Quezon City to regain its position of
prominence among Philippine cities through proper
management of planned change deserves support from
higher level authorities.
LGI 8 Dimension (ii) - Planned Urban
Development in the Three Largest Cities Assesses whether a process for planned urban development is followed in practice in
the 4 largest cities other than the largest city in the country.
Assessment
A – In the four major cities urban development is controlled effectively by a
hierarchy of regional/detailed land use plans that are kept up-to-date.
B – In the 4 major cities, while a hierarchy of regional/detailed land use plans is
specified by law, in practice urban devt is guided by the provision of infrastructure
which implements only a part of the land use plans.
C – In the four major cities in the country, while a hierarchy of regional/detailed
land use plans is specified by law, in practice urban development occurs in an ad
hoc manner with infrastructure provided some time after urbanization.
D – In the four major cities in the country a hierarchy of regional/detailed land use
plans may or may not be specified by law and in practice urban development occurs
in an ad hoc manner with little if any infrastructure provided in most newly
developing areas.
Findings The next four largest cities in terms of population are Davao, Manila, Caloocan
and Cebu.
The same observations about the ineffectiveness of land use planning to control the pace, direction and intensity of urban development generally apply to these four cities and most other cities. Reasons:
- Mistaken belief by local officials that government cannot regulate the use of land that is privately owned.
- LGUs do not own significant amount of of urban land nor are they taking steps to increase their landholdings.
- In the absence of a national law on land use cities and municipalities are left to their own devices to regulate land use.
- Provincial governments, though they are mandated to approve component LGUs‟ plans and zoning ordinances are not jointly responsible for their enforcement.
In view of these observations the panel rated this dimension “C”.
Recommendations
LGUs should seek to increase their landholdings to give
them a stronger hand in leveraging compliance with
socially desirable patterns of urban development.
Regulation of ownership, acquisition and disposition of
property and not use only should be devolved to LGUs.
Make provinces and their component cities and
municipalities jointly responsible in regulating land use
within their territorial jurisdiction.
LGI 8 Dimension (iii) - Coping with
Urban Growth
Assesses the ability of urban planning to cope with urban growth.
Assessment
A – In the largest city in the country, the urban planning process/authority is
able to cope with increasing demand for serviced units/land as evidenced by the
fact that almost all new dwellings are formal.
B – In the largest city in the country, the urban planning process/authority is able
to cope to some extent with the increasing demand for serviced units/land as
evidenced by the fact that most new dwellings are formal.
C –In the largest city in the country, the urban planning process/authority
is struggling to cope with the increasing demand for serviced units/land as
evidenced by the fact that most new dwellings are formal.
D – In the largest city in the country, the urban planning process/authority
cannot cope with the increasing demand for serviced units/land as evidenced by
the fact that most new dwellings are formal.
Findings
The panel found the indicator “number of new formal dwellings” inadequate to assess the ability of urban planning to cope with urban growth in the Philippines for the following reasons:
- There is a seeming over-supply of formal sector housing particularly high rise condominium units and yet there remains a huge unmet demand for housing.
- Production of formal dwelling units is not geared toward meeting housing need but rather responds to speculative demands for investment among segments of the population who are not exactly in need of housing.
These observed conditions point to the inability of urban planning in the Philippines to cope with urban growth.
The panel rated this dimension “C”.
Recommendations
Develop more appropriate indicators for the ability of
urban planning to cope with urban growth.
NHA and HUDCC should encourage LGUs and the
private sector to invest more in meeting the housing need
of the lower and middle income groups to effectively
reduce informality.
Clarify the mandate of municipal governments with
respect to socialized housing provision.
LGI 8 Dimension (iv) - Residential Plot
Size Adherence in Urban Areas
Measures the share of the population that violates plot size
restrictions is low.
Assessment
A – Existing requirements for residential plot sizes are met in at
least 90% of plots.
B – Existing requirements for residential plot sizes are met
between 70% and 90% of plots.
C – Existing requirements for residential plot sizes are met
between 50% and 70% of plots.
D – Existing requirements for residential plot sizes are met in less
than 50% of plots.
Findings
There are existing laws that prescribe lot sizes as well as
standards for physical development of subdivisions (PD 957,
BP 220).
Rampant practice of informal subdivision is largely
unmonitored and unregulated by the local governments.
There are wide deviations between allowed and actual
residential lot sizes.
The panel rated this dimension “C”.
Recommendations
Proper zoning and monitoring of subdivisions should be
made to ensure adherence to plot size standards.
Restrictions on plot sizes should be revisited in terms of
how it contributes to the objective of urban land reform
and providing equal opportunity for all Filipinos to own
land or at least have access to adequate urban space.
LGI 8 Dimension (v) - Use plans for specific land classes are in line with use Verifies that the proportion of land use in contravention of existing regulations or land use plans in rural areas is small.
Assessment
A – The share of land set aside for specific use that is used for a non-specified purpose in contravention of existing regulations is less than 10%.
B – The share of land set aside for specific use that is used for a non-specified purpose in contravention of existing regulations is between 10% and 30%.
C – The share of land set aside for specific use that is used for a non-specified purpose in contravention of existing regulations is between 30% and 50%.
D – The share of land set aside for specific use that is used for a non-specified purpose in contravention of existing regulations is greater than 50%.
Findings
In the case of areas under the public domain such as forest
lands and protected areas, use plans are not in line with actual
use. This is due to the fact that classifications are legal
statutes based on technical criteria and not necessarily on
actual use. For example, a good proportion of forest lands are
not necessarily covered with forest.
In view of this, the panel rated this dimension “C”.
Recommendations
The general public needs to be educated on the meaning
and purpose of the legal classification of land to raise the
level of their compliance.
Theme 2: Land Use Planning,
Management and Taxation
LGI-7: Transparency of
land use restrictions
•Public input on urban land use plan changes
•Public input on rural land use plan changes
•Value capture by public from land use changes
•Speed of land use change
LGI-8: Efficiency of land
use planning
•Urban development in largest city
•Urban development in 3 next largest cities
•Ability to cope with urban growth
•Plot size adherence
•Planned use aligned to actual
LGI-9: Speed and predictability
of enforcement of restricted
land uses
•Building requirements are realistic
•Issuance of building permits
LGI-10: Transparency of
valuations •Transparent valuation
•Valuation rolls are available
LGI-11: Tax collection efficiency •Exemptions are justified
•Tax roll is comprehensive
•Assessed taxes are collected
•Property taxes greater than cost
Dimensions
Indicators
LGI-9. Speed and transparency of
enforcement of restricted land uses
This indicator assesses the transparency and efficiency in
the process for the delivery of permissions for restricted
land uses.
LGI 9 Dimension (i) Applications for Building Permits
The requirements for building permits for residential dwellings are clearly disseminated and applications are affordable and processed in a non-discretionary manner.
Assessment
A – Requirements to obtain a building permit are technically justified, affordable, and clearly disseminated.
B – Requirements to obtain a building permit are technically justified and affordable but not clearly disseminated.
C – Requirements to obtain a building permit are technically justified but not affordable for the majority of those affected.
D – Requirements to obtain a building permit are over-engineered technically.
Findings
The panel unanimously rated this dimension “A” because
the requirements and procedures for securing residential
building permits are almost uniformly enforced and
complied with.
Recommendations
Continue with present practices and procedures.
LGI 9 Dimension (ii) - Time Required to
Obtain a Building Permit The time needed to obtain a building permit for residential dwellings is short.
Assessment
A – All applications for building permits receive a decision within 3 months.
B – All applications for building permits receive a decision within 6 months.
C – All applications for building permits receive a decision within 12 months.
D – All applications for building permits receive a decision after a period exceeding 12 months.
Findings
The panel found that building permits are issued well
within the cut-off period of 3 months provided are
requirements are complied with.
The panel rated this dimension “A”.
Recommendation
Continue present procedures and practices.
Theme 2: Land Use Planning,
Management and Taxation
LGI-7: Transparency of
land use restrictions
•Public input on urban land use plan changes
•Public input on rural land use plan changes
•Value capture by public from land use changes
•Speed of land use change
LGI-8: Efficiency of land
use planning
•Urban development in largest city
•Urban development in 3 next largest cities
•Ability to cope with urban growth
•Plot size adherence
•Planned use aligned to actual
LGI-9: Speed and predictability
of enforcement of restricted
land uses
•Building requirements are realistic
•Issuance of building permits
LGI-10: Transparency of
valuations •Transparent valuation
•Valuation rolls are available
LGI-11: Tax collection efficiency •Exemptions are justified
•Tax roll is comprehensive
•Assessed taxes are collected
•Property taxes greater than cost
Dimensions
Indicators
LGI-10. Transparency of valuations
This indicator assesses the transparency, accuracy, and
public availability of land and property valuations.
LGI 10 Dimension (i) - Process of Property Valuation
Assesses the extent to which the process of property valuation for tax purposes is clear, transparent, and comprehensive, and if based largely on market prices and regularly updated.
Assessment
A – The assessment of land/property values for tax purposes is based on market prices with minimal differences between recorded values and market prices across different uses and types of users and valuation rolls are regularly updated (at least every 5 years).
B – The assessment of land/property for tax purposes is based on market prices, but there are significant differences between recorded values and market prices across different uses and types of users or valuation rolls are not updated regularly or frequently (greater than every 5 years).
C – The assessment of land/property for tax purposes has some relationship to market prices, but there are significant differences between recorded values and market prices across different uses or types of users and valuation rolls are not updated regularly.
D – The assessment of land/property for tax purposes is not clearly based on market prices.
Findings
The Local Government Code clearly prescribes that assessment of properties subject to taxation should be based on market prices but determining market values has, until recently, been implemented rather loosely and not in accordance with international valuation practices.
The Manual on Real Property Appraisal and Assessment Operations that was used by assessors in the past provided a formula to determine market value but the data were based on sales submitted to the Assessor‟s office which were understated by property owners to avoid paying the appropriate taxes; thus, the values derived did not correspond to market prices resulting in SMVs that significantly deviated from the true market values for almost all types of properties.
With the issuance of the Philippine Valuation Standards and the Mass Appraisal Guidebook by the Department of Finance, local assessors are now mandated to implement a reformed valuation process following international standards but the process still has to take roots with assessors all over the country.
Regular updating of the SMV is not strictly followed mainly because the local legislative councils are the ones approving the Schedule and they equate SMV revision to “political suicide” based on the notion that increased market values will automatically result in higher property tax burdens.
Recommendations
Continuing professionalization of assessors and their intensive training in the use of the reformed valuation process.
Removal of the political dimension in the development and approval of the SMV through renewed support to the Valuation Reform Act bill which gives back to the DOF the authority to approve SMVs and also provides for a mechanism for certification that proposed SMVs comply with valuation standards.
Providing sanctions in the non-revision of the SMV (the VRA bill provides that LGUs that do not regularly update their SMVs shall not be authorized to collect real property taxes).
Review and rationalize the taxation of property ownership and transfers to remove the “incentive” for property owners to understate property values.
LGI 10 Dimension (ii) - Public
availability of valuation rolls
Assess public accessibility of Valuation rolls.
Assessment
A – There is a policy that valuation rolls be publicly accessible
and this policy is effective for all properties that are
considered for taxation.
B – There is a policy that valuation rolls be publicly accessible and
this policy is effective for most of the properties that are
considered for taxation.
C – There is a policy that valuation rolls be publicly accessible and
this policy is effective for a minority of properties that are
considered for taxation.
D – There is no policy that valuation rolls be publicly accessible.
Findings
The local governments‟ SMVs and the Bureau of Internal
Revenue‟s Zonal Values are available to the public and may
be accessed online in the case of the BIR‟s zonal values.
Hard copy documents may be requested from individual
LGUs.
Recommendations
BLGF to collect all SMVs and upload them to its website
for easier access by the public.
Theme 2: Land Use Planning,
Management and Taxation
LGI-7: Transparency of
land use restrictions
•Public input on urban land use plan changes
•Public input on rural land use plan changes
•Value capture by public from land use changes
•Speed of land use change
LGI-8: Efficiency of land
use planning
•Urban development in largest city
•Urban development in 3 next largest cities
•Ability to cope with urban growth
•Plot size adherence
•Planned use aligned to actual
LGI-9: Speed and predictability
of enforcement of restricted
land uses
•Building requirements are realistic
•Issuance of building permits
LGI-10: Transparency of
valuations •Transparent valuation
•Valuation rolls are available
LGI-11: Tax collection efficiency •Exemptions are justified
•Tax roll is comprehensive
•Assessed taxes are collected
•Property taxes greater than cost
Dimensions
Indicators
LGI-11. Collection efficiency
Indicator assesses the extent to which authorities
effectively implement tax collection.
LGI 11 Dimension (i) - Exemptions from
property taxes are justified and transparent
Checks that tax proceeds are not significantly reduced by a high number of exemptions to
the payment of land and property taxes.
Assessment
A – There are limited exemptions to the payment of land/property taxes, and the exemptions
that exist are clearly based on equity or efficiency grounds and applied in a transparent
and consistent manner.
B – There are limited exemptions to the payment of land/property taxes, and the exemptions
that exist are clearly based on equity or efficiency grounds but are not applied in a
transparent and consistent manner.
C – The exemptions to the payment of land/property taxes are not always clearly based
on equity or efficiency grounds and are not always applied in a transparent and
consistent manner.
D – It is not clear what rationale is applied in granting an exemption to the payment of
land/property taxes and there is considerable discretion in the granting of such
exemptions. Application in a „transparent and consistent manner‟ means that the basis
for the exemption is clearly defined, widely disseminated and uniformly applied.
Findings
The LGC repealed all RPT exemptions previously given under
special laws and now allows only 5 types of properties to be
exempt (properties owned by the government, those used for
religious, charitable or educational purposes, machineries and
equipment used by LGUs and GOCCs in the supply and
distribution of water and electric power, properties owned by
registered cooperatives, and machineries/equipment used for
pollution control and environmental protection).
Despite specific exemptions in the LGC, many LGUs offer RPT
exemptions, fully or partially, to attract investors into their
locality.
Many LGUs also give tax amnesties which are not authorized
under the law mainly to increase collections.
Recommendations
BLGF/DOF, together with DILG and the DOJ, should
review the power of LGUs to grant RPT exemptions and
their use to attract investments.
In the meantime that no definitive official position is in
place, BLGF should be more pro-active in giving advice
to LGUs in the correct implementation of the RPT
exemption authority allowed to them.
LGI 11 Dimension (ii) - Property holders liable
to pay property tax are listed on the tax roll
Assessment
A – More than 80% of property holders liable for land/property
tax are listed on the tax roll.
B – Between 70% and 80% of property holder liable for
land/property tax are listed on the tax roll.
C – Between 50% and 70% of property holder liable for
land/property tax are listed on the tax roll.
D – Less than 50% of property holders liable for land/property
tax are listed on the tax roll.
Findings
Assessors are unable to fully accomplish their task of
listing all properties and their owners in the assessment
roll because they are highly dependent on the reporting of
property owners and do not vigorously pursue the
discovery of new properties through ocular inspections
and investigations.
Some government officials and private persons (Register
of Deeds, building officials, geodetic engineers, notaries
public) do not provide the assessors with information
relating to property ownerships and transfers as mandated
under the LGC.
Recommendations
More vigorous implementation of LGC provisions
requiring certain government officials and private persons
to provide information to assessors (if possible, provide
sanctions for non-compliance by those concerned).
Require assessors to regularly update their tax maps and
tax rolls by going to the field and conducting inspections
and investigations and making use of new technology
(GIS) to discover new properties not yet listed in the
assessment roll.
LGI 11 Dimension (iii) - Assessed
property taxes are collected
Measures the closeness amount of tax revenue collected to the potential.
Assessment
A – More than 80% of assessed property taxes are collected.
B – Between 70% and 80% of assessed property taxes are collected.
C – Between 50% and 70% of assessed property taxes are collected.
D – Less than 50% of assessed property taxes are collected.
Findings
An NTRC study revealed that for the period 2003 to 2010, the average RPT collection efficiency for the country is only 59%.
One reason for the non-vigorous collection of RPT is too much dependence of many LGUs on the Internal Revenue Allotment (IRA) – provinces and municipalities are IRA-dependent to the extent of 79.3% and 76.1%, respectively, while cities are 43.2% IRA-dependent.
Administrative and judicial remedies provided in the LGC for the collection of delinquent RPT are not rigorously implemented.
Sanctions for local officials (primarily the treasurer and his staff) for not collecting the RPT are not utilized.
Recommendations
Treasurers should be required to seriously carry out their task of ensuring that all property taxes that are due are collected and appropriate sanctions should be meted out for non-compliance.
To assist treasurers in their task, BLGF should conduct intensive trainings on the use of administrative and judicial remedies for collecting delinquent taxes.
Adopt integrated computerized systems for property tax assessment and collection.
LGUs should regularly conduct tax compliance studies to determine their collection efficiency and serve as basis for developing an improved revenue collection program.
Review the IRA so that it does not serve as a disincentive for collecting the RPT; explore the use of collection efficiency as a factor in developing a new IRA formula.
LGI 11 Dimension (iv) - Property taxes
correspondence to costs of collection
Assesses how reasonable are tax collection costs in view of the
amount that is collected.
Not Assessed
A – The amount of property taxes collected exceeds the cost of
staff in charge of collection by a factor of more than 5.
B – The amount of property taxes collected is between 3 and 5
times cost of staff in charge of collection.
C – The amount of property taxes collected is between 1 and 3
times cost of staff in charge of collection.
D – The amount of property taxes collected is less than the cost of
staff in charge of collection.
Findings
There is no comprehensive study that can provide
information on the tax collection costs relative to the
amount of property taxes collected.
Under LAMP2, a review of national and local land-related
taxes and fees was conducted but it was not able to derive
the ratio of the cost of collection to revenues collected for
lack of empirical data.
Recommendations
A study estimating the ratio of the cost of collecting both
national and local property taxes to actual collections
should be undertaken to serve as baseline information.
End