Introduction

In the Philippine legal framework, zonal values represent the assessed fair market values of real properties, including agricultural land, as established by the Bureau of Internal Revenue (BIR) pursuant to Section 6(E) of Republic Act No. 8424, otherwise known as the National Internal Revenue Code of 1997 (NIRC), as amended. These values serve as a benchmark for computing internal revenue taxes, such as capital gains tax, donor's tax, estate tax, and documentary stamp tax, applicable to transactions involving real property. For agricultural land, which encompasses areas devoted to cultivation, livestock raising, or other agrarian pursuits, zonal values are critical in ensuring equitable taxation and preventing undervaluation that could lead to revenue losses for the government.

The determination and application of zonal values for agricultural land are governed by a combination of statutory provisions, administrative issuances, and judicial interpretations. This article provides a comprehensive overview of the concept, legal basis, methodologies for determination, procedures for accessing these values, potential challenges, and related considerations within the Philippine context.

Legal Basis and Framework

The authority to establish zonal values stems from the NIRC, which empowers the Commissioner of Internal Revenue to divide the Philippines into zones or areas and determine the fair market value of real properties therein. Specifically:

Section 6(E) of the NIRC: This provision mandates the BIR Commissioner to periodically revise zonal values to reflect current market conditions, ensuring they align with prevailing real estate trends.
Revenue Memorandum Orders (RMOs) and Revenue Regulations (RRs): The BIR issues RMOs to prescribe guidelines for zonal valuation. For instance, RMO No. 24-2013 outlines the procedures for the revision of zonal values, emphasizing the role of technical committees composed of BIR officials, local assessors, and private sector representatives.
Department of Finance (DOF) Oversight: Zonal values must be approved by the DOF Secretary before implementation, as per Executive Order No. 292 (Administrative Code of 1987).

For agricultural land, classifications under Republic Act No. 6657 (Comprehensive Agrarian Reform Law of 1988, as amended by RA 9700) and related agrarian laws influence valuation. Lands under the Comprehensive Agrarian Reform Program (CARP) may have distinct considerations, where zonal values intersect with just compensation principles outlined in Supreme Court rulings, such as in Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform (G.R. No. 78742, July 14, 1989), which affirmed the government's power to determine fair market value for expropriation.

Zonal values are not absolute; they are rebuttable presumptions of fair market value. Taxpayers may challenge them by presenting evidence of actual market value, as upheld in Commissioner of Internal Revenue v. Spouses Lim (G.R. No. 195643, September 10, 2014).

Classification of Agricultural Land for Zonal Valuation

Agricultural land is categorized based on productivity, topography, and usage, which directly impacts its zonal value:

Irrigated vs. Non-Irrigated: Irrigated ricelands typically command higher values due to enhanced productivity.
Crop-Specific Classifications: Values differ for rice, corn, coconut, sugar, or fruit-bearing lands.
Topographical Factors: Upland, lowland, or hilly terrains are factored in.
Proximity to Infrastructure: Lands near roads, markets, or urban centers may have elevated values, even if agriculturally zoned.

These classifications are derived from data provided by the Department of Agriculture (DA), local government units (LGUs), and real estate appraisers. The BIR's Zonal Valuation Schedules (ZVS) delineate these categories per municipality or city, often down to the barangay level.

Methodologies for Determining Zonal Values

The BIR employs a systematic approach to compute zonal values for agricultural land:

Data Collection: Gathering market data from deeds of sale, offers to sell, and appraisals submitted to the BIR and LGUs.
Comparative Sales Approach: Analyzing recent transactions of similar properties to establish benchmarks.
Income Approach: For productive agricultural lands, estimating value based on potential income (e.g., crop yields multiplied by market prices, less costs).
Cost Approach: Valuing land by adding the cost of improvements to the base land value, though less common for purely agricultural parcels.
Public Hearings and Consultations: The BIR conducts hearings with stakeholders, including farmers' associations, to incorporate feedback before finalizing values.

Revisions occur at least every three years or sooner if market conditions warrant, as per RMO No. 24-2013. For agricultural land, fluctuations in commodity prices (e.g., rice or coconut) can trigger adjustments.

Procedures for Finding Zonal Values

Accessing zonal values for agricultural land involves straightforward steps, primarily through official BIR channels:

Online Access via BIR Website:
- Visit the official BIR website (www.bir.gov.ph).
- Navigate to the "Zonal Values" section under "References" or "Tax Information."
- Select the region, province, city/municipality, and barangay. For agricultural land, specify the classification (e.g., "Irrigated Riceland").
- The site provides downloadable PDF schedules listing values per square meter or hectare.
Visit to Revenue District Offices (RDOs):
- Locate the appropriate RDO covering the property's location using the BIR's directory.
- Request a copy of the ZVS from the RDO's Assessment Division. No fees are typically charged for viewing, but certified copies may incur minimal costs.
Coordination with Local Assessors:
- LGU assessors' offices maintain copies of BIR zonal values, as they use these for real property tax (RPT) assessments under Republic Act No. 7160 (Local Government Code of 1991).
- For agricultural land, the Provincial or City Assessor can provide values aligned with the Schedule of Market Values (SMV), which often mirrors or references BIR zonal values.
Alternative Sources:
- The Department of Agrarian Reform (DAR) may assist for CARP-covered lands, providing valuation data tied to zonal schedules.
- Private appraisers accredited by the Bangko Sentral ng Pilipinas (BSP) or the Philippine Association of Realty Appraisers can offer insights, though official BIR values prevail for tax purposes.

When querying, provide details such as the Tax Declaration Number, property location, and land classification to ensure accuracy.

Updates and Revisions

Zonal values are dynamic. The BIR issues Revenue Memorandum Circulars (RMCs) announcing revisions. For example, post-typhoon or economic shifts (e.g., during the COVID-19 pandemic) may prompt adjustments for agricultural areas. Taxpayers should monitor BIR announcements or subscribe to updates via the website.

If a property's zonal value seems outdated, a request for revision can be filed with the BIR Commissioner, supported by evidence like recent sales data.

Challenges and Disputes

Common issues include:

Discrepancies Between BIR and LGU Values: BIR zonal values are for national taxes, while LGU SMVs are for RPT. Conflicts may arise, resolvable through administrative appeals.
Overvaluation Claims: Farmers may argue that zonal values do not account for soil degradation or environmental factors. Appeals are filed via a Petition for Review with the BIR's Legal Division, escalating to the Court of Tax Appeals (CTA) if necessary, as in CTA Case No. 9123.
Undeveloped or Idle Lands: Special rules under RA 10752 (Right-of-Way Act) apply for expropriation, where zonal values form the basis for just compensation.
Tax Implications: Using zonal values ensures compliance but may lead to higher taxes. Taxpayers can opt for the higher of zonal value or actual selling price for computations.

Judicial remedies include filing a protest under Section 229 of the NIRC or seeking declaratory relief in regular courts if values are deemed arbitrary.

Special Considerations for Agricultural Land

Agrarian Reform Linkages: For lands under CARP, zonal values influence landowner compensation. DAR Department Order No. 06-2019 integrates BIR values into just compensation formulas.
Environmental and Zoning Laws: Republic Act No. 9729 (Climate Change Act) and land use plans under HLURB (now DHSUD) may affect values for eco-sensitive agricultural areas.
Indigenous Peoples' Lands: Ancestral domains under RA 8371 (IPRA) require culturally sensitive valuations, often lower to preserve communal use.
Foreign Ownership Restrictions: Article XII of the 1987 Constitution prohibits foreign ownership of agricultural land, impacting market values and zonal assessments.

Conclusion

Finding zonal values for agricultural land in the Philippines is essential for tax compliance, property transactions, and agrarian reform processes. By leveraging BIR resources, stakeholders can access accurate, up-to-date information. While the system promotes transparency and fairness, ongoing reforms—such as digital enhancements to the BIR portal—aim to streamline access. Taxpayers are encouraged to consult professionals for complex cases to navigate the interplay of tax, agrarian, and property laws effectively. Understanding these values not only aids in fiscal responsibilities but also supports sustainable agricultural development in the archipelago.