The irregular manipulation of values of prime real estate properties had cost Pasay City losses initially estimated at P47.4 million in taxes covering a shopping mall firm alone, a Commission on Audit report said.

The city government may have lost several millions through under-collection of real estate tax that was triggered by the “manual manipulation of the market value” of thousands of prime real property units in the city.

In a financial audit of the city government’s books for 2008, the Commission on Audit stumbled upon the irregular under assessment of real estate values of eight pieces of real estate properties registered under the name of the firm operating big shopping malls in the country.

The city assessor’s office assessed the lots totaling 195,476 square meters at P2,100,225,780 only but a re-assessment made by COA showed that it should be placed at P2,930,140,000.

Danilo M. Rodriguez, COA supervising auditor, explained that as a result of the low assessment made by the city government an under collection of some P47.4 million was made.

“Weak input controls in the Real Property Tax Assessment System resulted to property valuation inconsistent with the amended assessment and market value per City Ordinance No. 2415 series of 2002,” the COA report observed.

It added: “This resulted to errors in the assessment of the value of the property and consequent computation of taxes. Understatement in income of P47,495,725.57 was discovered for the eight Real Property Units sampled in the audit.”

State auditors noted that the unit values of property are “manually inputted” in the Real Property Tax Assessment System of the City, thus, this has “exposed” the system to data manipulation.

”Since there were errors in the unit values which is the basis in the assessment of the market value of the property and consequent computation of the corresponding taxes, the income collected was understated by P47.4 million,” the audit report stated.

Apparently suspecting more irregularities in the assessment of real estate properties, COA auditors asked the city government to re-evaluate the property valuation of real properties in the city “to establish the under-assessment and under-payment of taxes.”

In the same report, COA scolded the city government for failing to register 68 vehicles with the Land Transportation Office and paying penalties for late registration of 30 more.

State auditors said this lapse on the party of local authorities had exposed the city government to possible liabilities in cases of accident or loss of the vehicles.

To solve the problem, COA asked Trinidad to consider a proposal that would impose on the defaulting end-user the penalties to be paid for late registration of vehicles “to force them to be responsible in monitoring the registration dates of their service vehicles.”