VALUATION & TAXATION COMPONENT

POVERTY ALLEVIATION & ECONOMIC

GROWTH THROUGH SECURE LAND TENURE

& EQUITABLE PROPERTY VALUATION & TAXATION

With technical assistance & funding support from:

Implemented by:

OverviewLAMP

LAMP

Outline of Presentations

LAM & LAMP OVERVIEW

VRA & RESAPHILIPPINE

VALUATION

STANDARDS

SMV REVISION

PROGRAM & DATABASE

DEVELOPMENT

THE PROPERTY

VALUATION STAFF

(PVS) CLUSTER

CENTERS

VALUATION

EDUCATION

T H E L A N D A D M I N I S T R A T I O N & M A N A G E M E N T ( L A M ) A G E N D A

LAMP

The Land Administration & Management (LAM) Program is a 15-20 years commitment of the Philippine Government to:

Alleviate poverty by improving the security of land tenure

Sustain economic growth by fostering efficient land markets in rural & urban areas

L A M A G E N D A

O B J E C T I V E S

A clear, coherent & consistent set of land administration policies & laws

An efficient land administration system supported by a sustainable financing mechanism

An effective & transparent land valuation system in line with internationally accepted standards

LAMP

P R O G R A M T I M E L I N E

LAMP12001-2003Conduct of policy studies & reform proposals.

LAMP1 Extension 2004

LAMP1 Transition 2005

LAMP22006-2010Implementation of recommendations & learnings under LAMP1

LAMP

DBM: Institutional Structures

DOJ: Land Laws & Regulations

DENR: Forest Boundary Delineation

NEDA: Land Development

DOF: Taxes & Fees

DOF: Land Valuation

L A M P 1 P O L I C Y S T U D I E S

LAMP

D O F F I N D I N G S

PROBLEMS ON PROPERTY VALUATION & TAXATION

LAND VALUATION

• Significant political influence in the valuation system

• Multiple, conflicting valuation methodologies

• Absence of uniform valuation standards

• Outdated, distorted real property values

• Limited access to information, use of information technology in the appraisal process

• Limited provisions for formal education & training of assessors/appraisers

TAXATION & FEES

• Multiple taxes on land ownership & transfers

• High transaction taxes discourage formal transactions & lead to opportunities for inappropriate practices

• Weak enforcement of land-related taxes

LAMP

D O F F I N D I N G S

PROBLEMS ON PROPERTY VALUATION & TAXATION

Constrained Economic Development

• Low property tax collection

• Inefficient land markets

• Inequitable distribution of tax burden

• Lack of confidence in the valuation system

• Confusion among users

Over 23 government agencies undertake real property valuation using different standards & methodologies

BIR zonal valuation has no fixed statutory review period

Mandated regular revision of SMVs is not conducted by local governments

Valuation is vulnerable to political pressure

Lack of monitoring & evaluation on valuation matters & assessors

Lack of uniform valuation standards

LAMP

D O F F I N D I N G S

PROBLEMS ON PROPERTY VALUATION & TAXATION

Continuous decline of LGU Compliance to the Local Government Code Requirement to Conduct General Revision of SMV once every 3 years

1993 (1st GR) 1996 (2nd GR) 1999 (3rd GR) 2002 (4th GR) 2005 (5th GR) 2006 (6th GR)

Provinces 75% 61% 57% 41% 27% 28%

Cities 92% 66% 52% 33% 34% 22%

Total 83% 63% 54% 36% 31% 25%

75% 61% 57% 41% 27% 28%92% 66% 52% 33% 34% 22%

83%

63%

54%

36%

31%

25%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Pe

rce

nt

of

LGU

Co

mp

lian

ce

Source: Bureau of Local Government Finance (BLGF)

LAMP

L A M P 1

REFORMS PROPOSED

LAND VALUATION

• Establish an independent, national authority that would set & enforce valuation standards & guidelines

• Adopt a single valuation base for taxation purposes

• De-politicize the property valuation system

• Professionalize the real property valuation industry & introduce appropriate education & training for practitioners

• Develop & implement a national real property database system

TAXATION & FEES

• Rationalize land-related taxes

• Rationalize fees progressing towards cost recovery of services

LAMP

Initial drafting of legislative measures Bill reforming the valuation system (now the VRA Bill) Bill on the regulation & professionalization of appraisal

practice (now the RESA Bill)

Initial development of 3 valuation standards Code of Conduct Market Value Basis of Valuation Mass Appraisal

Incorporation of the valuation standards in the Assessor’s Manual & conduct of a nationwide roll-out

L A M P 1

D O F A C C O M P L I S H M E N T S

2 N D L A N D A D M I N I S T R A T I O N & M A N A G E M E N T P R O J E C T

2006-2010 PROGRAM

LAMP

LAMP2 is a 5-year project built on the lessons & experience gained from LAMP1

It seeks to accelerate the process of land administration reform & apply the lessons of LAMP1 in selected regions, provinces & municipalities

Supports the progressive expansion of tenure security & the adoption of approved valuation standards & procedures through sustainable partnership agreements.

L A M P 2

P U R P O S E

LAMP

L A M P 2

P R O J E C T C O M P O N E N T S

LAMP

L A M P 2

L E G I S L A T I V E A D V O C A C Y

LAMP

L A M P 2

P R O J E C T C O M P O N E N T S

COMPONENT 1 Development of Policy & Regulatory Framework

Objectives

To pursue & develop policy, legislative & regulatory changes in support of LAM reform

Major Activities

Development of policy, legislation & regulations on LAM reforms to improve the management of government lands (ie, LARA, FPA, DAOs, etc.)

Development of LAA Transition Plan

Development & adoption of a Long-term Development Plan for the LAM Sector

COMPONENT 2Institutional Development & Capacity Building

Objectives

To develop transparent, gender-responsive & service-oriented institutional & HRMD arrangements for land administration & develop institutional capacity

Major Activities

Capacity building for LAMP2 agency staff & stakeholders

Organizational assessments & change management for LAM agencies

Establishment of LAM education & training

LAMP

L A M P 2

P R O J E C T C O M P O N E N T S

COMPONENT 3Land Tenure Security

Objectives

To increase the level of tenure security in urban & rural areas of selected provinces through an accelerated land adjudication program & establishment of an efficient & accessible land registration system

Major Activities

Increase community awareness of one’s rights, roles & responsibilities in a systematic adjudication of tenure rights & land boundaries

LGU partnerships to improve survey, mapping & systematic adjudication processes.

OSS/ integrated land registration & record management system.

COMPONENT 5Project Management

Objectives

To establish the organizational & management framework, systems & plans for the efficient & effective management & implementation of LAMP2

Major Activities

Project organization & management

Development of planning & management systems, monitoring & evaluation framework, & public relations strategy to engages stakeholders in supporting LAM reform

Develop a strategy & implementation plan to consolidate & sustain GOP commitment to LAM reform after 2010

THE 2ND LAND ADMINISTRATION & MANAGEMENT PROJECT (LAMP2)

R E A L P R O P E R T Y V A L U AT I O N & TA X AT I O N

LAMP

To improve the quality of government & private sector property appraisal performance through the adoption of uniform valuation standards & a single valuation base for taxation

To pursue property taxation reforms

To lay the foundation through education & training for the future expansion of property valuation & appraisal activities

C O M P O N E N T 4

O B J E C T I V E S

LAMP

4.1• Policy, legislative & regulatory activities pursuing the enactment of property valuation

& taxation reform

4.2

• National valuation standards & guidelines developed, approved & implemented by DOF, & one national government agency supported in the development of their own implementing rules & regulations

4.3

• Four LGUs (including LGUs in LAMP1) trained & with systems developed & in place, ready to adopt the unified single base property valuation system, two of which established as demonstration sites for cluster training

4.4• The PVS strengthened to provide valuation services & to support ongoing reform &

technology transfer

4.5• Information technology systems developed & rolled-out to improve valuation &

taxation processes in selected LGUs & PVS offices

4.6• Valuation education & training program developed & implemented

C O M P O N E N T 4

S U B C O M P O N E N T S

LAMP

C O M P O N E N T 4

S U B C O M P O N E N T A C T I V I T I E S

4.1 – Policy & Legislative Advocacy

Undertake internal advocacy within DOF & attached agencies on VRA & RESA

Undertake legislative advocacy with the Senate & House of Representatives to mobilize the enactment of VRA & RESA

Conduct tax policy studies

Advocate tax policy reforms with DOF & key officials of both Houses of Congress & with major stakeholders nationwide

Conduct consultative meetings & form partnerships with the direct stakeholders (LGU leagues, private, business, banking & basic sectors)

Undertake PR & media mobilization work

4.2 – Valuation Standards & Guidelines

Develop & implement national valuation standards & guidelines

Prepare manual/handbook on the national valuation standards

Roll-out developed valuation standards

Establish partnership with one national government agency (NGA)

LAMP

C O M P O N E N T 4

S U B C O M P O N E N T S

4.3 – SMV Reform Program

Undertake capacity building program for LGU partners

Assist in the revision of Schedule of Market Values (SMV)

Conduct revenue impact studies of the proposed SMV

Development of Valuation Handbooks to guide LGUs in the revision of SMVs

4.4 – Strengthening of the PVS

Capacity building interventionsCluster CenterCreation of the Property Valuation

Office (PVO) through an Executive Order

LAMP

C O M P O N E N T 4

S U B C O M P O N E N T S

4.5 – IT Systems Development

Development of the National Real Property Transactions Database

IT Capacity Building for PVS & LGU partners

Formulation of LGU guidelines on computerization of tax-related functions

Institutional IT policy formulation & implementation

Other IT technology development (ie, eFAAS)

4.6 – Valuation Education

Develop & deliver degree &non-degree graduate programs in land valuation through a local university (UP Open University)

Collaboration with an international academic institution for courseware development & follow international best practices

Faculty development Scholarship for practitioners Program promotion &

mainstreaming

LAMP

Simplified tax administration through a single valuation base

Rationalized, simpler, more transparent real property taxation

Improved planning & decision-making on land ownership & use by policymakers & property owners

Improved public & investor confidence that will stimulate the land market

More equitable real property tax burden

Harmonized valuation processes among government agencies

Improved competence of assessors/appraisers

Increased government revenues without necessarily adopting new tax measures

Increased GDP share of real property

Consistency in land valuation by eliminating wide disparities of values & political ambivalence

Strengthened local autonomy

C O M P O N E N T 4

E X P E C T E D I M P A C T

LAMP

Thank You!