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S TUDY ON THE R EVENUE I MPACT OF SMV R EVISION COMPONENT 4.1 B


W HY C ONDUCT

A

R EVENUE I MPACT S TUDY

 To provide information on the effects of the proposed SMV on LGU revenue and tax burden of property owners  To provide a starting point for formulating tax policy options responsive to the revenue requirements of the LGU and to taxpayers’ ability-to-pay  To promote transparency in the property tax system


M ISCONCEPTION B ETWEEN SMV R EVISION

AND

 Misconception: Property tax is strictly value driven  Fear of an increase in tax burden proportionate to the increase in the SMV

RPT


MARKET-BASED SMV AND RPT POLICY Technical Function of the Assessor

MARKETBASED SMV

Role of the Legislators

INTRODUCE NECESSARY TAX POLICY OPTIONS

REAL PROPERTY TAXES

LGU Budgetary Requirement

Taxpayers’ Ability-to-pay


POSSIBLE RPT POLICY OPTIONS Option 1:

Reduce the tax rate, e.g. from 2% to 1.75%

Option 2:

Reduce the assessment levels by 20%

Option 3:

Phase implementation of the increase in the tax, e.g. 1st year: 2nd year: 3rd year:

Option 4:

Old Tax + 50% of the increase in the tax Old Tax + 75% of the increase in the tax Old Tax +100% of the increase in the tax

Fixed capping of the increase in the tax, e.g. Old Tax + 30% of the increase in the tax every year for 3 years


TAX IMPACT CALCULATION (UNDER NEW MV) Total Market Value Property Classifica Land tion Area

New SMV MV

Assessed Value

Incremental RPT

RPT Based Assess Under Based Based on New ment Based Current New on New Amount % Inc. on SMV MV Level on SMV Tax Rate RPT MV MV

R1

100 sq.m

200

2,000 20,000 200,000 20%

4,000 40,000

2%

80

800

720 900%

C1

100 sq.m

300

3,000 30,000 300,000 50%

15,000 150,000

2%

300

3,000

2,700 900%

I1

500 sq.m

250

1,500 125,000 750,000 50%

62,500 375,000

2%

1,250

7,500

6,250 500%

40,300 200,000 40,300 200,000 40%

16,120 80,000

2%

322

1,600

1,278 396%

RL -irrig 1st 1 ha.


TAX IMPACT CALCULATION (UNDER OPTION 1)

Property Land Classifica Area tion

SMV

New MV

Total Market Value

Assessed Value

Incremental RPT

Tax Rate

Assess RPT Current ment Under RPT Based Level Based Option 1 Based Based Option on New on New Current Amount % Inc. on SMV on SMV 1 MV MV

R1

100 sq.m

200

2,000 20,000 200,000 20%

4,000 40,000

2%

1.75%

80

700

620 775%

C1

100 sq.m

300

3,000 30,000 300,000 50%

15,000 150,000

2%

1.75%

300

2,625

2,325 775%

I1

500 sq.m

250

1,500 125,000 750,000 50%

62,500 375,000

2%

1.75%

1,250

6,563

5,313 425%

RL -irrig 1st 1 ha. 40,300 200,000 40,300 200,000 40%

16,120 80,000

2%

1.75%

322

1,400

1,078 334%


TAX IMPACT CALCULATION (UNDER OPTION 2)

Property Land Classifica Area tion

Total Market Value

SMV

Assessment Level

Assessed Value

RPT Incremental RPT New Tax Current Under MV RPT Option Based Based Rate Based Option Based 2 on New Current on New Amount % Inc. on SMV 2 on SMV MV MV

R1

100

200

2,000 20,000 200,000 20%

16%

4,000 32,000

2%

80

640

560 700%

C1

100

300

3,000 30,000 300,000 50%

40%

15,000 120,000

2%

300

2,400

2,100 700%

I1

500

250

1,500 125,000 750,000 50%

40%

62,500 300,000

2%

1,250

6,000

4,750 380%

RL -irrig 1st

1

40,300 200,000 40,300 200,000 40%

32%

16,120 64,000

2%

322

1,280

958 297%


TAX IMPACT CALCULATION (UNDER OPTION 3 -Year 1)

Property Land Classifica Area tion

Total Market Value

SMV

Assessed Value Potential RPT Incremental RPT Assess New Tax Current ment MV RPT Under Under Based Level Based Rate Based Based on New on New New Option Amount % Inc. on SMV on SMV MV MV MV 3

R1

100 sq.m

200

2,000 20,000 200,000 20%

4,000 40,000

2%

80

800

440

400 500%

C1

100 sq.m

300

3,000 30,000 300,000 50%

15,000 150,000

2%

300

3,000

1,650

1,500 500%

I1

500 sq.m

250

1,500 125,000 750,000 50%

62,500 375,000

2%

1,250

7,500

4,375

3,750 300%

40,300 200,000 40,300 200,000 40%

16,120 80,000

2%

322

1,600

961

800 248%

RL -irrig 1st 1 ha.


TAX IMPACT CALCULATION (UNDER OPTION 4- Year 1)

Property Land Classifica Area tion

Total Market Value

SMV

New MV

Assessed Value

Potential RPT Incremental RPT

Assess Tax Current ment RPT Under Under Based Level Based Rate Based Based on New on New New Option Amount % Inc. on SMV on SMV MV MV MV 4

R1

100 sq.m

200

2,000 20,000 200,000 20%

4,000 40,000

2%

80

800

296

216 270%

C1

100 sq.m

300

3,000 30,000 300,000 50%

15,000 150,000

2%

300

3,000

1,110

810 270%

I1

500 sq.m

250

1,500 125,000 750,000 50%

62,500 375,000

2%

1,250

7,500

3,125

1,875 150%

40,300 200,000 40,300 200,000 40%

16,120 80,000

2%

322

1,600

706

383 119%

RL -irrig 1st 1 ha.


TAX IMPACT CALCULATION (UNDER VARIOUS OPTIONS) Property Classificat Land Area ion

SMV

New MV

Potential RPT

Assess ment Level

Tax Rate

Current RPT

Under Option 1 Option 2 Option 3 Option 4 New MV

R1

100 sq.m

200

2,000

20%

2%

80

800

700

640

440

296

C1

100 sq.m

300

3,000

50%

2%

300

3,000

2,625

2,400

1,650

1,110

I1

500 sq.m

250

1,500

50%

2%

1,250

7,500

6,563

6,000

4,375

3,125

RL -irrig 1st

1 ha.

40,300 200,000

40%

2%

322

1,600

1,400

1,280

961

706

Option 1:

Reduce the tax rate from 2% to 1.75%

Option 2: Option 3:

Reduce the assessment level by 20%. Phase implementation of the increase in the tax, e.g. Year 1: Old Tax + 50% of the increase in the tax Year 2: Old Tax + 75% of the increase in the tax Year 3: Old Tax + 100% of the increase in the tax

Option 4:

Fixed capping of the increase in the tax, e.g Old Tax + 30% of the increase in the tax


REVENUE IMPACT CALCULATION (P MILLION) Property Type

RPT Coll. @ Current Tax Collectible Adj MV Increase Coll Eff. Ave. % (Based New MV A. Level Tax Rate Coll. Eff. in RPT Inc. Based On Based on Based On Based on on SMV) Revenue SMV MV SMV MV

TOTAL

37,813 155%

96,297

210.59

570.32

53%

112.21

308.26

196.05

Residential

27,627 135%

63,957

20%

2%

110.51

255.83

45%

49.73

115.12

65.39

R-1

11,051 120%

24,312

20%

2%

44.204

97.25

45%

19.89

43.76

23.87

R-2

7,459 100%

14,918

20%

2%

29.836

59.67

45%

13.43

26.85

13.43

R-3

6,354 150%

15,885

20%

2%

25.416

63.54

45%

11.44

28.59

17.16

R-4

1,658 180%

4,642

20%

2%

6.632

18.57

45%

2.98

8.36

5.37

R-5

1,105 280%

4,199

20%

2%

4.42

16.80

45%

1.99

7.56

5.57

Commercial

1,579 200%

4,737

50%

2%

15.79

47.37

60%

9.47

28.42

18.95

Industrial

7,716 200%

23,148

50%

2%

77.16

231.48

65%

50.15

150.46

100.31

891 400%

4,455

40%

2%

7.128

35.64

40%

2.85

14.26

11.40

Agricultural


D ATA R EQUIREMENT 

Assessment Roll • With entries on location of property, land area, property sub-classification, unit value, market value, assessed value, etc.  Old and New SMV • With information old and new property classification; and old and new unit value for different locations/areas


COMPUTERIZED ASSESSMENT ROLL SN #

1 2 3 4 5

6 7

8 9 10

11

6 7 8 9

Tax Dec # Barangay 2001-110473-1 2001-110123-3 2001-110473-1 2001-1114473-1 2001-110473-1 200111104731 2001-1221473-1 2001-120473-1 2001-120473-1 2001-1220473-1 2001-310473-1 200111104731 2001-1221473-1 2001-120473-1 2001-120473-1

Abella Abella Abella Abella Abella

Abella Abella

Abella Abella Abella

Abella

Abella Abella Abella Abella

Property Property Property Owner Type Taxability Sub-Class Santos,Ra mona Sese, Pura Torres, Abad Villanueva , oniaT Santos, Perla Senseng, wilfredo Rosales, Juan Rosales, john Bautista, Feliciano Reyes, Nick Nicolas, Pedro Nicolas, Mario Marasigan , Pearl Solomon, Maria Ramos, Nora

Area

Unit Value

Adj MV

AL

Tax Rate Assessed Value Basic RPT SEF

RPT Collectible Basic RPT SEF

Land

T

R1

250

400

100,000.0 0

20% 20,000.00

1%

1%

200.00

200.00

Land

T

R1

100

400

44,000.00

20% 8,800.00

1%

1%

88.00

88.00

Land

T

R1

230

400

92,000.00

20% 18,400.00

1%

1%

184.00

184.00

Land

T

R1

140

400

56,000.00

20% 11,200.00

1%

1%

112.00

112.00

Land

T

R1

120

400

48,000.00

20% 9,600.00

1%

1%

96.00

96.00

Land

T

R2

120

300 32,400.00

20% 6,480.00

1%

1%

64.80

64.80

Land

T

R2

120

300 36,000.00

20% 7,200.00

1%

1%

72.00

72.00

Land

T

R2

100

300 30,000.00

20% 6,000.00

1%

1%

60.00

60.00

Land

T

R2

300

300 90,000.00

20% 18,000.00

1%

1%

180.00

180.00

Land

T

R2

120

250

30,000.00

20% 6,000.00

1%

1%

60.00

60.00

Land

T

R2

150

250

37,500.00

20% 7,500.00

1%

1%

75.00

75.00

Land

T

R3

60

250

15,000.00

20% 3,000.00

1%

1%

30.00

30.00

Land

T

R3

60

250

13,500.00

20% 2,700.00

1%

1%

27.00

27.00

Land

T

R3

60

250

15,000.00

20% 3,000.00

1%

1%

30.00

30.00

Land

T

R3

60

250

15,000.00

20% 3,000.00

1%

1%

30.00

30.00


OLD AND NEW SCHEDULE OF MARKET VALUE STREET/SUBDIVISION

VICINITY

2001 BASE VALUE

SUB CLASS

2006 BASE VALUE

SUB CLASS

ABELLA 001 Abella Street

Gen. Luna St. J. Hernandez Ave.

12,900

C-1

25,000

C-2

J. Hernandez Ave. - 1st 100m.

9,700

C-2

15,000

C-3

after 100m - Cnr Felix Plazo St.

2,500

C-5

12,500

C-4

Cnr F. Plazo St.-Naga

1,200

R-1

4,000

R-1

Bayawas Street

Abella Street-Looban 8

1,200

R-1

4,000

R-1

Felix Plazo Street

Abella St.- Igualdad Boundary

1,200

R-1

4,000

R-1

720

R-3

2,000

R-5

All inner lots J. Hernandez Ave.

Prieto St.-P. Burgos St.

12,900

C-1

25,000

C-2

General Luna St

Prieto St.-P. Burgos St.

12,900

C-1

35,000

C-1

P. Burgos Street

Gen. Luna St.-J. Hernandez

12,900

C-1

35,000

C-1

Prieto Street

J. Hernandez St.-Gen. Luna St.

12,900

C-1

25,000

C-2

BISALA

720

R-3

2,000

R-5

All Blighted Areas

200

R-5

500

R-8


P ROCEDURE For LGUs with computerized assessment rolls 1. Replace the existing SMV with the new MV and calculate the difference between the estimated RPT under the old and new SMV.  All RPUs , OR  Large Taxpayers (say Top 100)  Representative Sample RPUs 2. Determine the range of increase in values. 3. Identify areas heavily affected by the increase in values.


P ROCEDURE For non-computerized LGUs 1. Conduct selective tax impact studies on  Top ___ Taxpayers (contributing at least 60% of total RPT collection)  Sample RPUs 2. Determine the range of increase in values. 3. Identify areas heavily affected by the increase in values.


O THER F ACTORS TO BE C ONSIDERED I MPACT CALCULATION

   

Discounts Fines and Penalties RPT Incentives RPT Compliance Rate

IN THE

R EVENUE


THANK YOU!

Canned Presentation - Revenue Impact of SMV Revision  

STUDY ON THE REVENUE IMPACT OF SMV REVISION C O M P O N E N T 4 . 1 B  To provide information on the effects of the proposed SMV on LGU rev...

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