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DOF pushes land valuation reform before Duterte is gone


Division of Finance Constructing. | PHOTO: DOF Fb

MANILA, Philippines—Passing the long-pending land valuation reform invoice would enable native authorities items (LGUs) to faucet property taxes as a extra dependable income supply, the Division of Finance (DOF) mentioned on Friday (April 8).

In an financial bulletin, the DOF’s chief economist and former undersecretary Gil Beltran famous that public expenditures firstly of 2022 had been enlarged by the practically one-fourth greater share of native authorities items (LGUs), now known as nationwide tax allotment (NTA), on this yr’s P5.02-trillion nationwide funds.

The Division of Price range and Administration (DBM) final January launched P239.8 billion in LGUs’ first-quarter NTA. LGUs will obtain a complete of over P959 billion in NTA this yr, up from the P695.5 billion of their previously known as inner income allotment (IRA) final yr. This was according to the implementation of the Supreme Courtroom’s Mandanas-Garcia ruling, which required LGU shares in nationwide funds to be computed primarily based on all taxes collected by the Bureau of Inside Income (BIR) and Bureau of Customs.

Up to now, LGUs’ IRA solely got here from BIR collections.

With bigger budgets, LGUs now deal with native applications and tasks in infrastructure, agriculture, social welfare, well being care, in addition to livelihood, amongst different sectors listed within the Native Authorities Code.

“With greater resources, LGUs are henceforth expected to assume greater fiscal responsibilities and carry on the functions devolved to them by the LGU Code of 1991,” Beltran mentioned.

For Beltran, “this is effectively fiscal federalism, and could be further enhanced by passing the valuation reform act such that LGUs are empowered to mobilize even more internally generated resources.”

Belonging to the Duterte administration’s complete tax reform program, actual property valuation reform was geared toward growing an equitable and environment friendly system whereas broadening the tax base used for property-related taxes of the nationwide and native governments, Finance Secretary Carlos Dominguez III mentioned early this yr.

“Reforming the property valuation system to make it on par with global standards and shielding it from political influence will help LGUs raise more revenues without increasing the existing tax rates or imposing new taxes,” Dominguez had mentioned.

Two pending tax reform payments — actual property valuation and the passive revenue and monetary middleman taxation act (Pifita) — had been already handed by the Decrease Home, however remained pending within the Senate.

After the Could 9 nationwide elections, Congress may have solely two periods on Could 23 to June 3, before adjourning and paving the way in which for the following set of legislators in July.

Dominguez had mentioned that in case the pending payments on land valuation and capital market taxation gained’t cross within the present 18th Congress, they’d be a part of the fiscal consolidation proposal for the following administration’s consideration.

The financial group led by the DOF will flip over to the following President a fiscal consolidation plan, which can embrace new or larger taxes, spending cuts on non-priority sectors, and financial progress drivers to revert the funds deficit to pre-pandemic ranges of about 3 p.c of gross home product (GDP) whereas repaying money owed that ballooned amid the extended COVID-19 pandemic.

TSB

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