NTRC bucks property tax exemption for seniors

STATE-RUN National Tax Research Center (NTRC) is bucking a congressional bill that proposes exempting from property tax the homes and land owned by senior citizens.

Documents from the NTRC showed that House Bill 4530 aims to give senior citizens a real property tax privilege in recognition of their limited income and the rising cost of basic commodities. The bill seeks to amend Section 4 of Republic Act 7432,  or the Senior Citizens Act, as amended by Republic Act 9257.

The Department of Finance-attached agency, however, said that the proposed exemption from real property tax is unadvisable because of its adverse effect on the revenues of local governments.

The property tax is a major source of local governments revenues, contributing around 48.67 percent of their total earnings, according to the Commission on Audit. Assuming that 2 percent of the assessed or taxable values of lands and improvements are owned by senior citizens, local governments would forego an estimated P222.62 million in property taxes. If the revenue from this tax is eroded, the local governments’ financial position will be affected, the NTRC said.

The state-run research center also warned that the proposed exemption may bring pseudo-transfers of property to avail of the tax privilege. It may also bring about some administrative problems. For example, difficulties in monitoring the real property ownership of taxpayers may arise since a taxpayer may own several properties that will be exempted every time a general revision of property values is undertaken.

The NTRC also said the bill would discriminate against senior citizens who are homeless or stay in rented or leased dwelling units since rented properties are levied the property tax.
–Johanna M. Sampan, Manila Times