Issues/Challenges on current property tax system

1. Multiple taxes on property ownership and transfers

2. Lack of uniform property valuation systems and methodologies
3. Political intervention in property valuation
4. Limited use of information technologies in the appraisal process
5. BIR has the power to adjudicate disputes on its own tax assessment. This is bereft
of any independence as the examiner who issues the assessment is the same examiner
who will validate and assess the reconciliation and factual and legal bases of the
taxpayer in asserting that the assessment is not valid or incorrect. While it may be true
that the court acts as the final arbiter of tax disputes, the high filing fees and other legal
costs nonetheless, makes tax appeal virtually impossible especially for ordinary
taxpayers. Adjudicators should not only be independent, but must likewise give the
appearance of independence. While taxes are the lifeblood of a nation, taxpayers’ rights
are important and must always be protected.

Sources:

https://www.imf.org/external/np/seminars/eng/2013/asiatax/pdfs/philippines.pdf

https://www.grantthornton.com.ph/insights/articles-and-updates1/lets-talk-tax/improving-the-
philippine-tax-system/

Suggestions/Recommendations for Improvement

1. Existence of a “Unified Property Tax Assessment”, which includes/summarizes all the

taxes payable by the project owner/proponent based on the valuation by the Bureau of
Finance/LGU through a uniform property tax valuation system. This form of
appraisal/assessment seeks to simplify and speed up the tax-payment process. In
addition, a summarized assessment is easier to account and refer to for later purposes
that may serve the company or the assessor (BOF/LGU).
(a) The Unified Tax Assessment shall include the necessary references and
bases for the valuation of each unit of the project
2. In this uniform property tax valuation system, a database of current fair market
values of properties that have similar characteristics with the current project. This
system aims to provide a uniform assessment for all properties in the Philippines,
thereby ensuring a fair and just assessment for all properties. In addition, this system
shall make referencing easier for all purposes that may benefit the company/project
owner and the government assessor (BOF/LGU).
(a) Similar Characteristics/Properties may include: (1) land area, space
occupied, (2) nature of property [industrial, residential] (3) environmental
impact
(b) The database must be continuously updated with respect to the current state
of the market.
3. This database must be made available to the project proponent/owner so that the project
owner/proponent may have the freedom of self-valuation. This allows for a faster
completion of tax-related responsibilities.
4. In the case of dispute/conflict between the two parties, i.e. there is a considerable
difference between the valuation of the project owner/proponent and the BOF/LGU’s
agents, an independent third party, who is/are qualified and is/are experts in such field
(appraisal, fair-market valuation) shall act as an adjudicator for the dispute.