DAVAO CITY—Local government units (LGUs) have been asked to modernize their tax administration along the line of digital environment saying that the economy under the “new normal” would be “heavily digitized” and “all future processes will occur mainly online.”
Finance Secretary Carlos G. Dominguez III issued this call during a recognition program for top-performing LGUs in creative and innovative revenue generation.
Dominguez said the LGUs must adopt digital technologies in tax administration and their other business processes “in order for them to build their revenue generation and mobilization capabilities under the new normal.”
“The local governments must keep pace with this digital transition—starting with local government finance. The new economy will be highly digitized. All future processes will occur mainly online,” the chief of the Department of Finance (DOF) said.
He explained that LGUs would play a key role in the country’s economic recovery “that is now gaining momentum as provinces, cities and municipalities are expected to lead in the grassroots planning, community infrastructure and the initiation of more linkages to the economic mainstream on behalf of their constituents.”
“We have seen the future and it is fully electronic. We owe our constituents digital transformation of local governance,” Dominguez said in his pre-recorded keynote speech at the Bureau of Local Government Finance (BLGF) Stakeholders Recognition Program held last Tuesday at the Clark Freeport Zone in Pampanga.
The Finance Secretary was said to have assured local executives that the DOF and the BLGF would support the effort of LGUs’ digital-transition initiatives. He said revenue share in national taxes of LGUs was due to increase dramatically starting next year with the implementation of the Mandanas Ruling. Dominguez said local governments would be “primarily responsible and accountable for providing their constituents with the basic services and facilities fully devolved to them.”
“These expanded responsibilities devolved to them mean that LGUs have to beef up their revenue collection and absorptive capacities as they build their way towards becoming self-reliant communities,” the DOF chief said.
To accomplish these tasks, Dominguez said LGUs should adopt electronic facilities for business registration and renewal, as well as for the assessment and collection of local taxes, fees and other charges.
The local treasurers should start linking up with the online payment facilities already offered by government financial institutions, he added. Dominguez said these entities also serve as their depository and servicing banks to ensure safe, efficient and convenient ways of transacting with LGUs under the new normal.
He said the national government and the LGUs “need to work together in improving revenue generation and tax administration to make the country’s fiscal resources last amid the pandemic.”
“Even as we stretch resources to stimulate the economy, we must continuously build up our fiscal resilience,” Dominguez said. “We will continue relying on the local governments for all the vital things that need to be done as we move from a pandemic to an endemic condition.”
The Finance Secretary said the government would continue the constant monitoring of communities, continuous contact tracing and the administration of booster shots “in the years ahead.”
“They will be integral to the functions of the local governments,” Dominguez said.