Tag Archives: internal revenue allotment.

Tax on idle land readied

The Manila Times
October 5, 2010

THE Aquino administration plans to impose a tax on all idle agricultural properties in a bid to shore up its revenues amid a record budget deficit this year. On the sidelines of the launch of the government’s Food Supply Chain Program, Finance Secretary Cesar Purisima said the idle land tax is mandated in the Local Government Code (LGC) and Agricultural and Fisheries Modernization Act (AFMA), enabling local government units to compel landowners to put their agricultural land to productive use.

The Finance chief said making productive use of idle land would help augment the country’s food supply.

The LGC considers idle land tax as a revenue-raising measure while the AFMA treats it as a form of a penalty for agricultural inactivity.

Under both laws, the municipal treasurer should collect the idle land tax.

The municipality however does not retain the proceeds as these accrue to the general fund of the province as per the LGC mandate, and to the national treasury in the case of AFMA.

Purisima said the idle land tax can augment local government revenues, adding that the tax rate could go as high as 5 percent.

With more local revenues at their disposal, local governments may reduce their dependence on internal revenue allotments, he said.

“It will serve as a means to encourage optimum use of agricultural land,” he also said.

Agriculture Secretary Proceso Alcala said the agency would also push for the idle land taxation to address the 2013 rice self-sufficiency target of the country.

“We have to increase production, and we can do this by forcing these landowners to use these agricultural lands in agriculture purposes,” Alcala said.

He, however, admitted that the legal definition of “idle land” is vague and as a result, the taxes were not collected in the past.

With its top revenue agencies missing their monthly goals, the government has been looking for ways to keep its budget deficit from exceeding the P325-billion ceiling.