The study looks into the experience of Quezon City in the conduct of public auction of delinquent real properties to determine its effectiveness as a tool in improving real property tax compliance.
Public auction of real property is one of the remedies provided in the LGC which can be used by the LGUs for the effective collection of delinquent taxes on real properties. The other remedies are distraint of personal property and judicial remedy.
An examination of the results of the 2002-2004 auction sales shows that the program has been beneficial to Quezon City. The owners of an average of 52% (110 out of 213 delinquent properties during the three year period) settled their tax obligations before the properties were subject to public auction. The City Government gained an income of P21.94 million from the sale of delinquent properties to the highest bidders as compared to the total delinquency of P3.46 million from said properties. As regards delinquent real properties not redeemed by the owners nor sold to the highest bidders, the City still stands to gain as these properties are considered purchased by the City Government.
The City’s program of conducting public auctions as a collection remedy demonstrates its determination and capability to enforce the laws on real property taxation. The fact that it is fully supported by the elected officials of Quezon City is a very strong indicator of the City Government’s firm intent to go after tax evaders. This will not only deter future evasions but will also generate goodwill from honest taxpayers.
However, in order that the conduct of public auction of delinquent properties be above suspicion of taxpayers and beyond reproach, it is imperative that the real property tax administration be further strengthened by, among others, computerizing revenue collection and records on real property to facilitate their inventory and retrieval.
