AS they are set to get a smaller revenue share from the national government next year, local government units (LGUs) were urged to break free from their dependence on National Tax Allotment (NTA) by unlocking potential fund sources.
Bureau of Local Government Finance (BLGF) Director Ricardo L. Bobis, Jr. said LGUs can generate more revenues by improving their tax collection, noting that many LGUs have not updated their local revenue code.
“LGUs must break away from NTA dependence,” Bobis said in a recent virtual forum dubbed “The Mandanas Ruling and Prospects for NTA-dependent LGUs.”
“There are ways to generate local revenues, such as improving real property tax collection and the process of collection,” he added. “Make delinquent taxpayers pay, improve business tax collection and regularly examine books.”
The continued implementation of the Supreme Court’s Mandanas Ruling widened the revenue base used to determine the NTA share to be received by LGUs every year. However, lockdown measures resulted in an economic slowdown, which led to a revenue decline for the national government, particularly in 2020, the first year of the pandemic.
The projected NTA share of LGUs next year will only amount to around P820 billion, 14.5-percent down from P959 billion this year given that the NTA is computed based on the collections in the third fiscal year preceding the current fiscal year. In this case, the base year was the collected revenues in 2020.
Meanwhile, Visayas State University Department of Tourism and Hospitality Management Head Venice B. Ibañez encouraged LGUs to look into tourism as an “opportunity to strategically allocate and optimize the use of its economic resources and funds.”
“It is a potential revenue source and will bring about a vibrant economic environment,” Ibañez said. “People will book where to stay, will look where to eat and will travel for lookouts.”
Barcelona, Sorsogon Mayor Cynthia Falcotelo-Fortes said tourism promotion and accessing programs of national government agencies and state-run Land Bank of the Philippines enabled their 5th-class municipality to break free from their dependence on NTA.
“The town has been reaping gains in tourism,” Fortes said. “Jobs were produced and public-private partnerships were created such as our banana lakatan production, duck production, cut-flower shops and other businesses while trading posts were set up by the LGU.”
Moreover, civil organizations should also actively participate in governance through participatory planning, according to “Bantay Kita” Mindanao Subnational Coordinator Beverly F. Besmanos.
Besmanos cited the acquisition of royalty fees from corporations for the use of the resources of ancestral domains.
“Royalty fees can be allocated to emergency concerns, investments, including livelihood and educational projects, or capitalization for co-operative development and such,” she said.
On top of these, local governments were also urged by the speakers to use information and communication technologies and digitize data collection to facilitate analysis for plans and policy developments and automate transactions.