THE Provincial Assessor’s Office has been commended by the Commission on Audit for updating Iloilo’s Schedule of Market Values (SMV) which took effect this year and could help rake in more revenues after 14 years of non-revision.
SMV is an approved schedule of base market values for different classes of real property used by the provincial, city or municipal assessor as basis for the appraisal and assessment of real properties.
Out of the six provinces in Western Visayas, only Iloilo, Aklan and Negros Occidental have updated SMV (2017 version) based on June 2018 record of the Bureau of Local Government Finance Western Visayas.
The general revision of assessment and property classification every three years is required under Section 219 of Republic Act (RA) 7160 (Local Government Code of the Philippines). But prior to the revision, the schedule of fair market values must be updated as prescribed in Section 212 of RA 7160.
Revising the SMV will result to improve real property tax collection for the local government unit, empowerment of property owners in terms of buy and sell transactions and tax dues become fair and equitable for taxpayers.
In her March 2018 Audit Observation Memorandum, State Auditor V Eleanor Mena noted that Iloilo missed four general revisions of SMV since 2003. Comparing the latest (2017) to the earlier (2003) version of SMV, COA computed P15.6-billion difference between the projected taxable assessed value of Calendar Years 2016 (P23.7 billion) and 2017 (P39.4 billion).
“The figure alone is already enough to assume that the IPG lost so much revenue which could gave boosted its finances for the implementation of various programs, projects and activities for the benefit of its constituents,” the report says.
COA emphasized that the non-updating of SMV resulted to opportunity lost for the provincial government. Hence, the effort of the Provincial Assessor’s Office to update and revise the SMV in 2017 was commendable.
Property taxation is the largest tax source at local levels. For the Province of Iloilo, real property tax and real property transfer tax are its second and third largest source of income after its internal revenue allotment from the national government.
Now that the 2017 SMV is in effect, the Provincial Assessor’s Office projects a tremendous increase in 2018 revenue collection.
It will specifically result to 207.2 percent increase in total taxable market value of real properties (e.g. land, buildings, and machineries) from P117 billion in 3rd quarter to P359 billion in 4th quarter of 2017.
The total taxable assessed value will increase only by 46.41 percent or from P28 billion in 3rd quarter to P40.9 billion in 4th quarter of 2017.
The total taxable assessed value of restricted properties (these are properties covered by Comprehensive Agrarian Reform Program or in litigation) will decrease by 67.93 percent or from P4 billion in 3rd quarter to P2.7 billion in 4th quarter.
The total assessed value net of restrictions will now increase by 59.7 percent from P23.9 billion in 3rd quarter to P38.2 billion in 4th quarter.
Real property tax (RPT) is the product of the market value multiplied by the assessment level (residential, commercial, agricultural, industrial, etc) and tax rate (2 percent).
Of the one percent Basic Real Property Tax, 35 percent goes to the General Fund of provincial government, 40 percent for the municipal government and 25 percent for the barangay.
One percent of the RPT is also for the Special Education Fund (SEF) wherein half of the amount goes to the Provincial School Board and the remaining half goes to the Municipal School Board.
Basic RPT is used to improve social services and public health through repair and maintain roads, bridges, hospitals, construction of community-based infrastructures, financial assistance to indigents, relief assistance during calamities, among others.
SEF is specifically used to improve the quality of education in public schools by way of establishing an environment conducive for learning and development (e.g. repair and construction of school buildings and facilities, sports development activities). (Jezza A. Nepomoceno)