Duterte favors heavy taxes on idle lands, says Pernia

By Czeriza Valencia (The Philippine Star) Updated February 21, 2017 – 12:00am http://www.philstar.com/business/2017/02/21/1674193/duterte-favors-heavy-taxes-idle-lands-says-pernia MANILA, Philippines – President Duterte meant it when he said earlier this month that idle lands would be taxed heavily under his term unless these are brought to productive use, said Socioeconomic Planning Secretary Ernesto Pernia. He said the President threatened to double, even triple, the taxes imposed on land holdings that have not been developed for 10 to 20 years unless used for public welfare. This, Pernia said, is meant to end the rampant practice of speculation in real property. “Regarding idle lands, I think he means it,” said Pernia in a recent interview. “What remains to be determined is the appropriate tax rate.” The Local Government Code of 1991 allows provincial, city and municipal governments to levy an ad valorem tax on idle lands at the rate not exceeding five percent of the assessed value of the property which shall be imposed on top of the basic real property tax. Strengthening land use regulation and  taxation of idle lands, was in fact among the proposals contained in the position paper submitted by economic managers to the President when they opposed the proposal of the Department of Agrarian Reform (DAR) to impose a two-year moratorium on the conversion of agricultural lands. The joint position paper was signed along with Pernia by the secretaries of finance, budget, trade and the vice president. DAR last year wanted to impose the moratorium to prevent the conversion of agricultural lands into subdivisions. The economic team, however, argued this would prevent the government and the private sector from addressing the 5.5 million backlog in housing units especially those providing for shelter needs of the poor. The proposed ban would also delay, and to some extent, prevent the construction of vital infrastructure for which right-of-way have to be secured. In the position paper, the economic managers said taxing idle lands would force owners to put them into productive use. Pernia said, however, that the President’s pronouncement still needs to be studied further. “Yes, it still needs a study,” he said.