NGO supports move for more taxes on idle land
By MARVYN N. BENANING
November 14, 2010, 2:53pm
Page 13
MANILA, Philippines – The La Liga Policy Institute (La Liga) has lauded the Department of Finance (DoF) and the Department of Interior and Local Government (DILG) for thinking of imposing an idle land tax to beef up revenues of local government units (LGUs).
La Liga said it supports the recent signing of a Joint Circular Memorandum on Idle Land Tax by DoF Secretary Cesar Purisima and DILG Secretary Jesse Robredo that enjoined all local councils to enact an ordinance for the implementation of additional ad valorem tax on idle land.
Purisima and Robredo also vowed to assist LGUs in implementing the idle land tax.
La Liga managing director Roland Cabigas stressed that LGUs will greatly benefit if they implement such tax since the proceeds could also be used to raise food production, boost economic development and provide resources for basic services, including programs related to the attainment of local Millennium Development Goals (MDGs.)
A recent book published by La Liga suggested that such tax be imposed on absentee landlords who don’t make their land productive.
Such idle land tax had been imposed in Japan, which has little arable land, to stimulate economic activity and make property owners understand their role as stewards of scarce resources.
La Liga said the failure to cultivate such land contributes in no small measure to chronic food deficit in the Philippines.
The book, “Enhancing Taxation on Idle Agricultural Lands – A Policy Study in Aid of Legislation,” revealed that despite the law and various policy directives which define the framework, parameters and mechanics, the adoption of the idle land tax by LGUs had been slow.
Adopting the idle land tax can optimize the use of the land while providing revenues to LGUs, the book said. Discussions on the matter were published in a series of reports last year by the Manila Bulletin.
One reason for the delayed implementation of the tax is the fact that many local officials are landowners themselves.
La Liga wants to impose the levy on landlords since they are not contributing to economic growth by leaving their properties idle.
“By imposing the tax, landlords will be forced to invest in agriculture or use their land to avoid paying taxes,” Cabigas explained.
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.”
The DILG chief revealed that out of 80 provinces and 121 cities, only five provinces, namely, Cagayan, Isabela, Cavite, Aklan, and Capiz and 8 cities, namely Marikina, Tagaytay, Trece Martires, Naga, Navotas, Iloilo, Pasig, and Mandaluyong are imposing the idle land tax.
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