MANILA, Philippines - The Department of Finance (DOF) and the Department of Interior and Local Government (DILG) have jointly issued guidelines on the imposition of additional ad valorem tax on idle lands.
According to Republic Act 7160, otherwise known as the Local Government Code, a province, city or municipality within the metropolitan Manila area may levy an annual tax on idle lands, which shall be in addition to the basic real property tax.
The guidelines have been issued to remind LGUs to slap taxes on idle lands in a bid to generate more revenues for the local government units and to enhance local economic development at the local levels.
According to the guidelines, the imposition of real property taxes shall cover idle lands including agricultural lands and even residential lots.
Owners of idle lands shall only be exempted from payment of the additional levy by reason of “force majeure, civil disturbance, natural calamity or any cause or circumstances which physically or legally prevent the owners of property or person having legal interest therein from improving, utilizing or cultivating the same.”
All proceeds of the additional real property tax on idle lands shall accrue to the respective general fund of the province or the city where the land is located, the guidelines also said.
Furthermore, the guidelines also stipulated that the DOF’s Bureau of Local Government Finance shall receive and validate LGUs’ reports on additional ad valorem tax on idle lands and shall provide the necessary technical assistance to LGUs.
The issuance of the guidelines on the collection of ad valorem tax on idle lands is part of the government’s efforts to boost state coffers.
The government is trying to address a widening budget gap that is projected to hit P325 billion this year. From January to August, the budget gap has already amounted to P228.1 billion, up from P210 billion in the same period last year. The government posted a surplus of P1.3 billion in August alone but this was mainly due to underspending.