I, FERDINAND E. MARCOS, President of the Philippines, by
virtue of the powers in me vested by the Constitution as Commander-in-Chief of
the Armed Forces of the Philippines, and pursuant to Proclamation No. 1081,
dated September 21, 1972, and General Order No. 1, dated September 22, 1972, as
amended, and knowing —
That, values of real properly and improvements therein are usually
underdeclared obviously for the purpose of evading payment of higher and correct
taxes due the Government;
That, although real property and the improvements therein are undervalued for
purposes of taxation, these real property are sold to the Government when needed
for public purposes, such as the construction of roads and other
infrastructures, at their market value which are usually ten (10) to twenty (20)
times more than the value declared by the owners for purposes of taxation; and
—
In order to effect the desired changes and reforms in the social, economic
and political structure of the country, which is the main objective of the New
Society, hereby decree and order that:
It shall be the duty of all persons, natural or juridical, owning or
administering real property, including the improvements therein, within a city,
municipality or municipal district, or their duly authorized representative, to
prepare, or cause to be prepared, and file with the provincial or city assessor
not later than June 30, 1973, a sworn statement declaring the true value of
their property, whether previously declared or undeclared, taxable or exempt,
which shall be the current and fair market value of the property, as determined
by the declarant.
The "current and fair market value" shall be understood to mean the "price at
which a willing seller would sell and a willing buyer would buy neither being
under abnormal pressure."
For purposes of just compensation in cases of private property acquired by
the Government for public use, the basis shall be the current and fair market
value declared by the owner or administrator, or such market value as determined
by the assessor, whichever is lower.
Under this Decree, the assessed valuation which shall be the basis for the
payment of real property tax beginning with the calendar year 1974 shall be
fifty per centum of the current and fair market value, as determined by the
assessor, in the case of commercial, industrial or mineral lands; forty per
centum in the case of agricultural lands; and thirty per centum in the case of
lands for purely residential purposes.
All improvements, including machineries, shall be assessed independently of
lands and their assessments shall be maintained at their current levels, but in
no case shall such levels be lower than the assessment levels for lands
hereinabove prescribed nor more than eighty per centum of current and fair
market value, except for purely residential houses used as residence of the
owners thereof the assessment levels of which are hereby fixed as follows:
Assessment Level
Current and Fair
Market Value
15%
P30,000.00 or less
20%
30,001.00
to
P50,000.00
25%
50,001.00
to
75,000.00
35%
75,001,00
to
100,000.00
45%
100,001.00
to
150,000.00
55%
150,001.00
to
250,000.00
65%
250,001.00
to
350,000.00
75%
350,001.00
to
500,000.00
80%
over
500,000.00
to
Every five years hereafter, revision of real property assessment shall be
undertaken by provincial and city assessor, and no increase in the current
assessment level, as determined by the assessor, at any one time shall be more
than ten per centum of the assessment levels mentioned in the foregoing
paragraphs: Provided, That the limitation herein fixed on the frequency of
assessment revision and increase in assessment levels shall not apply if the
nature of the real estate has been changed from rural to urban or from
residential to commercial and industrial site: And provided, further, That the
assessment level of real property shall not exceed eighty per centum of current
and fair market value, except upon prior approval of the Secretary of Finance.
When real property is found in any city, municipality or municipal district,
the owner or administrator of which failed to file the sworn statement required
under this Decree on or before June 30, 1973, the provincial or city assessor
shall himself declare the property in the name of the defaulting owner, if
known, or against an unknown owner, as the case may be, and shall assess the
property for taxation in accordance with the provisions of this Decree.
No oath shall be required of a declaration thus made by the provincial or
city assessor.
When the entire assessed valuation of real property in any one municipality
or municipal district belonging to a single owner is not in excess of five
hundred pesos, the tax thereon shall not be collected though in any event the
property shall be valued for the purposes of assessment and record shall be kept
thereof.
All existing tax declarations as of December 31, 1973 shall be superseded by
the corresponding new tax declarations issued under this Decree. Collections,
however, of delinquent real property taxes as of December 31, 1973 shall be
computed on the basis of the assessed value and rates of penalty then obtaining.
To achieve a uniform appraisal of real property, provincial and city
assessors shall prepare a schedule of current and fair market value of different
classes of real property in their respective jurisdictions, using as guide the
instruction prescribed in the implementing rules prescribed by the Secretary of
Finance. Copies of the schedule of market values shall be furnished the
Secretary of Finance not later than September 30, 1973; and the same shall be
adopted for use under this Decree unless modified or revised by the Secretary of
Finance on or before November 30, 1973.
Any owner who is not satisfied with the action of the provincial or city
assessor in the assessment of his property under this Decree may, within sixty
days from the date of receipt by him of the written notice of assessment, appeal
to the Board of Tax (Assessment) Appeals of the province or city, which shall be
composed of three members: the Register of Deeds, as Chairman, the Provincial or
City Auditor and the Provincial or City Engineer, as Members, who shall serve as
such in an ex officio capacity without additional compensation.
The Provincial or City Board of Tax (Assessment) Appeals shall decide the
appeal within sixty days from receipt thereof. The decision of the Board shall
fully recite the consideration upon which it is founded. Upon receipt of the
decision, the Provincial or City Assessor shall thereupon act accordingly. If,
however, the owner or administrator of the property or the assessor be not
satisfied with the decision of the Board of Tax (Assessment) Appeals, he may,
within thirty days after receipt of the decision of the Board, appeal to the
Central Board of Tax (Assessment) Appeals, composed of the Secretary of Finance,
as Chairman, the Secretary of Justice and the Secretary of Local Governments and
Community Development, as Members, whose decision shall be Final. Said Central
Board of Tax (Assessment) Appeals shall promulgate rules and regulations
governing the procedure in such appeals.
The appeal, however, shall not suspend the collections of the corresponding
realty taxes as assessed by the provincial or city assessor, without prejudice
to subsequent adjustment depending upon the final outcome of the appeal.
To effectively implement the objective of this Decree, provincial, city,
municipal or municipal district boards or councils shall provide the necessary
appropriations to underwrite or defray expenses incident thereto, using for the
purpose any unappropriated balances in the general, road and bridge and/or
permanent public improvement funds; any underestimated revenues accruing thereto
or reversions of unauthorized appropriations in their respective budgets which
are not otherwise urgently needed, existing laws to the contrary
notwithstanding.
Any increase in the shares of provinces, cities, municipalities and
municipal districts from the additional one per centum realty tax levied and
apportioned under Republic Act No. 5447, accruing to their respective local
school boards commencing with fiscal year 1973-74 over what has been actually
realized during the fiscal year 1971-72 which, for purposes of this Decree,
shall remain as the base year, shall be divided equally between the general fund
and special education fund of the local government units concerned. The
Secretary of Finance may, however, at his discretion, increase to not more than
seventy-five per centum the amount that shall accrue annually to the local
general fund.
Failure to pay the real property tax before the expiration of the terms for
the payment without penalty of the quarterly installments thereof, shall subject
the taxpayer to the payment of a penalty equivalent to two per centum on the
amount of the delinquent tax for each month of delinquency or fraction thereof
until the delinquent tax shall be fully paid: Provided, That in no case shall
the total penalty exceed twenty-four per centum of the delinquent tax. The rate
of penalty for tax delinquency fixed herein shall be uniformly applied in all
provinces and cities.
Anyone who shall knowingly make false declaration concerning any property or
who shall deliberately fail to file the sworn statement required in this Decree
shall, upon conviction, pay a fine of not less than five hundred pesos nor more
than ten thousand pesos. If the offense is committed by a corporation, the
manager or person in charge of the management of the business of the
corporations shall be responsible thereof.
Any Officer charged with the duty of assessing real property, who shall
wilfully fail to assess, or shall omit from the tax lists, any real property
which he knows to be lawfully taxable pursuant to and according to this Decree
shall be punished by a fine not exceeding five thousand pesos, or imprisonment
of not more than two years, or both, at the discretion of the court.
Any government official or employee who shall intentionally and deliberately
delay the filing of the real property tax declaration or the filing of any
appeal against an assessment shall, upon conviction, be punished by a fine of
not more than one thousand pesos or by imprisonment of not more than two years,
or both, at the discretion of the court.
The Secretary of Finance is hereby ordered to formulate the implementing
rules and regulations to be followed by all Provincial and City Assessors for
the immediate and successful implementation of this Decree.
This Decree shall form part of the laws of the land and shall take effect
immediately after its publication. All laws, rules and regulations which are
inconsistent with this Decree are hereby repealed.
Done in the City of Manila, this 6th day of December, in the year of Our
Lord, nineteen hundred and seventy-two.
(Sgd.) FERDINAND E. MARCOS
President
Republic of the Philippines
By the President:
(Sgd.) ALEJANDRO MELCHOR
Secretary Executive