Local governments urged to better manage finances
How can provincial governors look after their own constituents if they still rely heavily on the national government’s coffers to fund projects at the local level?
This question was asked once again by the Department of Finance (DOF) through its latest “Tax Watch” ad, which, instead of the usual focus on the private sector, looked into the way local governments manage their own finances.
In its latest Tax Watch ad, the DOF showed that four of five provincial governments in the country still compute their property tax assessments based on outdated land prices.
“Revenues from real property tax (RPT) sustain local government units’ delivery of basic services for the people,” the ad said, stressing the importance of local government collections.
The DOF said RPTs should be computed based on a formal Schedule of Market Values (SMV) that is fair and updated.
The DOF said provinces were required to update their SMVs every three years.
“Several provinces failed to comply with this provision,” the ad said.
“When local governments fail to update their SMVs, they result in limited revenues to the government and cause unjust burden to taxpayers,” it added.
Out of 80 provinces in the country, only 18 had updated SMVs, the DOF said.
These were Agusan del Sur, Camarines Norte, Capiz, Catanduanes, Cebu, Compostela Valley, Davao del Sur, Kalinga, Laguna, Lanao del Norte, Negros Occidental, Northern Samar, Nueva Ecija, Occidental Mindoro, Siquijor, Sorsogon, South Cotabato and Surigao del Norte.
The worst offender was Maguindanao, which last updated its SMV in 1985.
This means property taxes paid by landowners in the area are much lower than what they should be.
Basilan last updated its SMV in 1992, while Marinduque did in 1993. Abra, North Cotabato and Pangasinan last updated their SMVs in 2010.
The DOF’s latest ad is in line with its recent thrust to pressure towns and cities to raise money on their own and rely less on their Internal Revenue Allotments (IRA) from the national government.
Last month, the DOF asked the Department of Interior and Local Government (DILG) to include “fiscal sustainability” in its criteria for determining which towns and cities deserve seals of good governance.
