LGUs should implement tax on idle lands – DoF

By CHINO S. LEYCO

December 19, 2010, 3:20pm

The Department of Finance (DoF) has asked local government units (LGUs) to implement the idle land tax to improve their own revenue collections and maximize their tax potentials.

Finance Secretary Cesar V. Purisima said in a statement that all LGUs should update their schedule of market values to boost real property tax collection as well as to implement the idle land tax.

“Together with the Department of Interior and Local Government (DILG), we are ready to provide them technical assistance in their implementation of these two taxes,” Purisima said.

He earlier cited that in 1970, there was an idle land tax that support spending of the LGUs.

“The local government units have the ability to raise local revenues and efficiency in collecting real estate taxes,” Purisima said.

In October, the finance department and the DILG signed a joint circular memorandum on idle land tax enjoining all local sanggunians to enact an appropriate ordinance for the proper implementation of the additional ad valorem tax on idle lands.

Section 236 of the Local Government Code provides that “A province or city or a municipality within Metro Manila, may levy an annual tax on idle lands at the rate not exceeding 5 percent of the assessed value of the property which shall be in addition to the basic real property tax.”

“Implementing the idle land tax will not only generate additional revenues for local government units which they can use to fund key devolved social services but will also enhance economic and agricultural development through the maximization of lands for productive use,” Purisima stressed. Out of 80 provinces and 121 cities, only 5 provinces (Cagayan, Isabela, Cavite, Aklan, and Capiz) and 8 cities (Marikina, Tagaytay, Trece Martires, Naga, Navotas, Iloilo, Pasig, and Mandaluyong) are imposing idle land tax.