Erring taxpayers to enjoy RPT amnesty

Erring taxpayers to enjoy RPT amnesty
SunStar Local News

CITIZENS who have been delinquent in paying their real property taxes will enjoy a two-year amnesty on interest, surcharges and penalties for unpaid real property taxes (RPT).

This is one of the benefits of the newly signed Real Property Valuation and Assessment Reform Act (RPVARA), aside from improved tax collection, single value base, increased transparency, fiscal autonomy, reduced disputes and increased investor confidence.

The new law provides a two-year amnesty that will cover the penalties, surcharges and interests on all unpaid RPT.

The amnesty is to encourage tax compliance and improve RPT collection, the law said.

On June 13, 2024, President Ferdinand Marcos Jr. signed into law the RPVARA, which aims to streamline and enhance the real property valuation and assessment system through a uniform appraisal in compliance with international standards.

Cebu City Councilor Noel Wenceslao, chairman of the committee on budget and finance, said more than 40 percent of the real property owners in Cebu City are delinquent taxpayers.

“For the first two years, all the real property owners who are delinquent, this is advantageous to them because of the amnesty,” said Wenceslao in an interview on Friday, June 21.

Acting Mayor Raymond Alvin Garcia, on the other hand, said the amnesty for delinquent taxpayers would mean a loss to the City’s tax collection, but this would actually entice real property owners to pay their RPT.

Garcia said the City Government may lose income from the interest, but the City may actually generate actual income from the RPT and not just on the books.

Garcia drew on this experience when Cebu City implemented an amnesty for delinquent real property owners about three years ago.

Garcia said many availed themselves of such amnesty, which resulted in the City earning P500 million from delinquent taxpayers who paid their principal dues.

“You lose out on the interest, yes, but the principle is that P1 today is better than P10 next year. Basta kay makuha na nimo ang income,” said Garcia.

“The money is not only on paper, but nagkupot na gyud ta, which we can already use for projects,” he added.

Erring real property owners may settle their principal dues through one-time or installment payment, he said.

In Cebu City, an amendment to its Real Property Tax Code is pending before the City Council.

This was already the second version of the proposed amendment to the RPT after the first revision approved in 2022 was vetoed by Mayor Michael Rama in 2023.

With the new law, Wenceslao said they will wait for the valuation that the National Government will set and will just adopt it.

He said there is no more need for them to continue with the existing pending amendment.

Wenceslao said once the National Government sets the valuation, the City will study if it is advantageous to the real property owners or not.

That will be the only time the City will revisit its existing RPT if there is a need to adjust the assessment level, said Wenceslao.

He said if he amended the proposed ordinance based on how the National Government set the base unit value, the City would just increase or decrease the assessment level.

“If we find that the value set by the National Government is too high, we can reduce the assessment level. Or, if it is too low, we can raise the assessment level. If we keep it as is, we can also give discounts for a staggered implementation of the RPT,” Wenceslao said.

Wenceslao said the National Government, through the Bureau of Local Government Finance (BLGF), will set the base unit value for all the properties, saying assessment levels are percentages of the base unit value used in taxation, which can still be adjusted.

“They are the ones who set the base unit value. The base unit value is uniform, meaning whatever the BIR sets as the base unit value is also applied to the local government unit.” Wenceslao said.

When asked if there’d be a big difference between the National Government set base unit value and his ordinance, Wenceslao said he could not provide details for now since the BLGF has not set a base unit value yet.

“But I am sure there will be a difference in terms of the base unit value set by the National Government compared to what we proposed in the RPT ordinance,” he said.

In a privileged speech delivered on Wednesday, June 19, City Councilor Rey Gealon called for the deferment of any discussions about the RPT, urging the proponent of the ordinance, Wenceslao, to visit his proposal in light of RPVARA.

Gealon said the proposed ordinance should have an “aspiration to provide a just, equitable and efficient real property valuation system for the benefit of the Cebuanos.” / with AML

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