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‘ADJUST REAL ESTATE TAXES’

COA tells Lapu-Lapu city to stop using 1994 assessed value

First Posted 07:25:00 11/23/2010

Lapu-Lapu City may have to increase its real property taxes.

The Commission on Audit (COA) called the attention of the Lapu-Lapu City government on its continued collection of real property taxes using 1994 assessed values.

A bigger collection could have been used for the delivery of basic services.

However, no city ordinance was passed by the City Council to impose increased assessment levels, said auditors.

Property values in Lapu-Lapu City are expected to go up due to its status as a highly urbanized city since 2007 and as a lone congressional district since 2009.

Auditors noted that the city government remains ?very conservative? with its real property taxation.

In barangay Poblacion I, for example, the assessed value of properties should have gone up by 5.30 percent compared to its 1994 assessment level.

Auditors noted that the public didn?t oppose an increase in real property assessment levels.

A public hearing held on Dec. 22, 2008, for the supposed increase in assessment level based on the 2009 values yielded favorable results.

But no ordinance was enacted by the Lapu-Lapu City Council that would allow implementation of an increase.

The failure of the City Treasurer's Office to give the accounting department an updated list of real property taxpayers has also shortchanged the city by P481.829 million in tax collections.

Lapu-Lapu City collected P55 million in real property taxes and another P55 million in Special Education Fund in 2009. Total collect for the year was P110 million.

Auditors said the city government could have collected P481.829 million more had Lapu-Lapu updated it?s certified list of taxpayers.

Of the collectibles, P280.430 million was carried over from 2007 yet.

The 2009 real property tax collection is only 39 percent compared to its business tax collection of P140 million for the same year.

Lapses in the city's tax collection topped eight items, which COA noted in its annual audit report.

Auditors also cited the city's failure to account for at least P703-million worth of properties.

The audit reviewed Lapu-Lapu?s financial transactions and compliance with audit rules.

It included a A value-for-money audit on real property tax collection.

Overall, supervising auditor Anecita Pilapil said the financial statements fairly presents the financial position of Lapu-Lapu as of Dec. 31, 2009.

Arturo Radaza was the incumbent mayor during the audit period.

COA Regional Director Delfin Aguilar in a June 30 letter thanked Radaza for his cooperation. A copy of the audit report was sent on Sept. 13, 2010, to his wife, Paz, who assumed office as Lapu-Lapu mayor on July 1.

In their exit conference, representatives of Arturo Radaza, now congressman of Lapu-Lapu's first lone district, told auditors they would ask the City Council to have the needed tax ordinance passed.

Auditors said that even the city treasurer promised to recompute tax delinquencies and establish a real property tax receivable system to collect the uncollected tax dues.

Revisions on Lapu-Lapu City's fair market value of real properties were made from 1997 to 1999, 2000 to 2002, 2003 to 2005, 2006 to 2008; and 2009 to 2011.

Under the Local Government Code, a ?general revision of assessments and property classification? starts with the passage of an ordinance adopting a schedule of fair market values.

After the implementation of new assessment values, the city treasurer ?shall undertake the general revision of real property assessment and property classification once every three years.?

In a separate audit observation, COA said that as of Dec. 31, 2009, the city government declared P1.174 billion worth of properties.

The city assessor's report only mentioned P471.5 million worth of the city-owned land and buildings leaving an ?unaccounted? balance of P703 million.

Auditors said that unaccounted properties were a result of the city's lack of subsidiary ledger cards and a duly accomplished inventory report.

Certificates of title of the city's properties also lack the properties acquisition cost and market value.

During their exit conference with COA, city officials promised to create an inventory committee to reconcile property records.


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