Canned Presentation - Tax Compliance & Distributional Impact Study

C O M P O N E N T 4 . 1 B

PROPERT Y TA X

COMPLIANCE

DISTRIBUTIONAL

IMPACT STUDY&

P R E S E N T A T I O N O U T L I N E

1. Objectives of the study

2. Scope of the study

3. Methodology

4. Data requirements

5. Use of the study

O B J E C T I V E S O F T H E S T U D Y

To assess compliance in the payment of property taxes

To recommend measures to improve property tax compliance

To introduce greater equity in the distribution of the tax burden among taxpayers

S C O P E O F T H E S T U D Y

Examine compliance in the payment of property taxes covering the most recent completed tax year

M E T H O D O L O G Y

TAX GAP APPROACH

Compliance rate = Actual Collection x 100Potential Tax

where

Actual Collection = Current year’s collectionPotential Tax = Tax Collectible

= Total Assessed Value x Tax Rate

M E T H O D O L O D Y

Cleaning and Matching of Assessment and Collection Reports for each RPU (or sample RPUs)

Data Processing Data Analysis

M E T H O D O L O G Y

The study involves the following:1. Review of local legislation2. Analysis of overall LGU performance in RPT collection3. Establishing appropriate strata of property values4. Analysis of tax delinquencies5. Analysis of tax discounts6. Formulate recommendations to improve tax compliance

PROPERTY TAX COMPLIANCE & DISTRIBUTIONAL IMPACT STUDY

data requirements

D A T A R E Q U I R E M E N T S

ASSESSOR’S OFFICE

1. Property Assessment Roll (complete, updated, computerized)

2. Summary of Real Property Assessments

D A T A R E Q U I R E M E N T S

TREASURER’S OFFICE

1. Daily report of basic RPT & SEF collection (complete, computerized)

2. Statement of Revenue/Income & Expenditures3. Breakdown of Collection from Basic RPT & SEF4. List of Properties Enjoying RPT Incentives/

Exemptions5. Collection from delinquent taxes & amount of

discounts

PIN TDN Ow-

ner

Brgy Class

(sub-

class)

Typ

e

Tax

abili

ty

(T/E)

Area

(in

SqM)

Unit

Value

Marke

t

Value

Asses

sed

Value

Asse

ssm

ent

Leve

l

Tax

Rate

Est.

Tax

Due

EXAMPLE

20

01

-11

-

04

73

-1

Sia,Ram

on

Del

Ro

sario

THE DATA: COMPUTERIZED ASSESSMENT ROLL

ROLL

Date Name

Tax Dec

#

OR #

Brgy Class Basic RPT SEF Tax Total Net Coll.Cur

rent Yr

Disc Prior Yr/s

Penalties Current Yr

Disc Prior Yr/s

Penalties

CurrentYr

Prior Yr/s

CurrentYr

Prior Yr/s

EXAMPLE

01

/13

/20

09

Sia,Ram

on

20

01

-11

-04

73

-1

12

34

56

Del R

osario

Co

mm

ercial

48

,75

0

(4,8

75

)

5,0

00

0 2,0

00

39

,00

0

(3,9

00

)

4,0

00

0 1,5

00

91

,47

5

THE DATA: DAILY RPT RECORD

1. Determine the assessment year or the effectivityyear of the Assessment Roll

2. Check for duplicated entries, and make sure there is only a single (unique) entry

3. Check whether all important fields are filled, e.g., TDN, land area, property sub-class, market values, assessed value, etc.

DATA CLEANING: ASSESSMENT ROLL

4. Ensure that the text format of the Tax Declaration Number (TDN) is similar for all entries -> establishes the link between the assessor and treasurers’ data

5. Take note of properties with 0% assessment, e.g., residential buildings with MV of 175,000 and below; AND those that are tax-exempt, e.g., “government properties”

DATA CLEANING: ASSESSMENT ROLLDATA CLEANING: ASSESSMENT ROLL

1. Make one entry for all real property units (RPUs) paid on installment basis -> get the total payment

2. Ensure that the text format of the Tax Declaration Number (TDN) is similar for all entries -> establishes the link between the assessor and treasurers’ data

DATA CLEANING: DAILY RPT RECORDDATA CLEANING: DAILY RPT RECORD

D A T A P R O C E S S I N G

SUMMARY TABLES

1. RPT Compliance by Property Stratum: 20082. RPT Compliance by Property Classification: 20083. RPT Compliance by Barangay: 20084. Dist. of the RPT Collection by Property Stratum: 20085. Dist. of the RPT Collection by Property Classification:

20086. Dist. of the RPT Collection by Barangay: 2008

D A T A P R O C E S S I N G

SUMMARY TABLES

7. Advance and Prompt Payments by Property Stratum: 2008

8. Advance & Prompt Payments by Property Classification: 2008

9. Advance & Prompt Payments by Barangay: 200810. Tax Delinquencies by Property Stratum: 200811. Tax Delinquencies by Property Classification: 2008 12. Tax Delinquencies by Barangay: 2008

D A T A A N A L Y S I S

1. Analysis of RPT Compliance Rate, By Property Classification

Residential Commercial Industrial Agricultural

D A T A A N A L Y S I S

2. Analysis of RPT Compliance Rate by Property Stratum Low-value Property Medium-Value Property High-Value Property

3. Analysis of RPT Compliance Rate by Barangay (or municipalities in case of province)

D A T A A N A L Y S I S

4. Analysis of Distribution of RPT Collection By Property Classification By Property Stratum By Barangay (or municipalities in case

of province)5. Analysis of Tax Discounts, Tax

Delinquencies6. Analysis of Over-all LGU Performance in

RPT Collection

PROPERTY TAX COMPLIANCE & DISTRIBUTIONAL IMPACT STUDY

uses of the study

U S E S

Basis for estimating revenue impact

Guide to local council members

Tool to determine the weaknesses of current tax enforcement processes & procedures

THANK YOU!