IDLE LANDS TAXATION (ILT)
Sec. 236 of the Local Government Code of 1991 (RA-7160) provided the additional “Ad Valorem” Tax of Idle Lands which state that “A province or city, or a municipality within Metropolitan Manila Area, may levy an annual tax on idle lands at the rate not exceeding five percent (5%) of the assessed value of the property which shall be in addition to the basic real property tax. Conversely, on the succeeding Sec. 237 of the same Act, is the provision for the coverage of Idle Lands which does not have a clear and definite definition as to the policy for the implementation of such provision to LGUs.
In October 20, 2010, a Joint Memorandum Circular (JMC) was issued by the DOF and DILG under JMC No. 2010-02 to compliments the implementation of the Idle Land Taxation. Subsequently, the BLGF issued a Memorandum Circular No. 05-2012 in order to assess the implementation and requesting LGUs to submit relevant data on idle lands. Due to lack of implementable definition of idle lands, it has resulted to poor submission of data among LGUs. To address the low turn-out of data submission and to properly guide the implementation of ILT, the BLGF/DOF and DILG issued a draft Joint Memorandum Circular entitled “Policy Guidelines and Operating Procedures for the Mandatory Inventory of Idle Lands and Optional Imposition of Additional “Ad Valorem” Tax on Idle Lands in the LGUs”.
One of the salient features of the draft JMC is the Types of Idle Lands under Section 7;
A. FOR AGRICULTURAL LANDS:
a. Type I – refers to any type of agricultural land that is vacant and devoid of improvements or any preparations applied to the land to commence agricultural productivity (e.g., tilling, application of fertilizer compost or other kinds of soil preparations, planting crops, and the like);
b. Type II – refers to an agricultural land suited and/or used for crop farming, except perennial or permanent crops, where at least 50% of the total land area is uncultivated (e.g., unplanted or unprepared for agricultural productivity);
c. Type III – refers to an agricultural land dedicated for planting permanent or perennial crops with less than 50% perennial crop planted per hectares;
d. Type IV – refers to any type of agricultural land, except those exclusively dedicated for crop farming, that requires intensive investment on improvements (e.g., poultry farms, livestock farms, in-land fish farms, etc.), but which existing improvements do not cover more than 50% of the total land area;
e. Type V – refers to any type of agricultural land, except those exclusively dedicated to crop farming, that requires intensive investment on improvements (e.g., poultry farms, livestock farms, in-land fish farms, etc.), but which the value of the existing improvements is less than 50% of the assessed value of the land; and
f. Type VI – refers to any type of agricultural land used both for planting crops and other agricultural purposes requiring various types of improvements, where the total value of improvements is less than 50% of the assessed value of the land, and the area of cultivated and improved land do not cover more than 50% of the total land area.
B. FOR NON-AGRICULTURAL LANDS:
a. Type I – refers to any non-agricultural land that is vacant and devoid of any improvement or any type of preparation applied to the land to commence construction of improvements (e.g., pre-construction processes such as land clearing, excavation, trenching, grading, etc.);
b. Type II – refers to any non-agricultural land with existing improvement/s that does/do not cover more than 50% of the total land area; and
c. Type III – refers to any non-agricultural land where the total value of existing improvements is less than 50% of the assessed value of the land.
This Idle Lands Taxation would encourage LGUs to implement the ILT that would definitely generate additional revenue. This will serve also as a land regulatory policy to catalyze high density land development, optimize agricultural productivity in the countryside, mitigate speculative landownership, and support sustainable urban development.
Should you have any comments / objections / reactions of this draft JMC, please feel free to do so