Higher tax take boosts LGUs’ revenues

Local government units’ (LGUs) revenues rose by over a tenth to P204.1 billion as of September last year amid improving efficiency in tax collection, the Department of Finance (DOF) said on Wednesday.

Citing a report of its attached agency, the Bureau of Local Government Finance (BLGF), the DOF said in a statement that the LGUs’ collections in the first nine months of 2019 grew 12 percent from P182.3 billion in the same period of 2018.

Local taxes collected by provinces, cities and municipalities hit P152.2 billion at end-September, up 12 percent from P135.6 billion a year ago.

In particular, local business taxes accounted for P95.1 billion, which fell short of the P96.3-billion goal for the period.

Nontax revenues, meanwhile, reached P51.9 billion, up 11 percent from P46.7 billion a year ago.

However, total end-September LGU revenues fell below the P238-billion target for the nine-month period, the DOF said.

According to the BLGF, local taxes contributed 28 percent of LGUs’ revenue sources, while nontax revenues accounted for 9 percent.

The bulk of LGU funds still came from their internal revenue allotment, as the mandatory share from national taxes comprised 63 percent.

“Underscoring the need to pass package three of the comprehensive tax reform program, which aims to institute reforms in the country’s land valuation system, is LGUs’ low efficiency rate of 68 percent on real property tax collections in the third quarter. Real property tax collections of LGUs of P57 billion as against the BLGF’s target of P83.8 billion is still an improvement over the 58-percent collection efficiency rate of LGUs in 2018,” the DOF said.

The third tax package was already passed by the Lower House, but it remained pending in the Senate.

The DOF targets to pass the entire comprehensive tax reform program within the year.

For 2020, provincial, city and municipal treasurers had been tasked with collecting P307.1 billion, nearly a fifth higher than the full-year 2019 target of P257.6 billion.

Provincial treasurers were expected to post P54.2 billion in revenue; city treasurers, P213.7 billion, and municipal treasurers, P39.2 billion. —BEN O. DE VERA