The fiscal performance and tax collection efficiency of local government units (LGUs) improved last year, as the revenue generated by LGUs rose by 12 percent as of end-September 2019, the Department of Finance (DOF) said.
The DOF said in a statement yesterday the LGUs collected P204.09 billion as of the third quarter last year, higher than the P182.27 billion collected in the same period in 2018 by all provinces, cities and municipalities, citing the Bureau of Local Government Finance’s (BLGF) latest report to Carlos Dominguez, DOF secretary.
According to the BLGF, local tax revenues accounted for 28 percent of the revenue source of LGUs as of the third quarter of 2019, which totaled P152.15 billion in that period. This represents a 12 percent increase from the P135.56 billion in taxes collected by LGUs in the third quarter of 2018.
Non-tax revenues of LGUs amounted to P51.94 billion as of the third quarter of 2019, an 11 percent improvement from its collection of P46.7 billion in 2018 during the same period, the BLGF said in its report.
It also said collections from local business taxes, which reached P95.11 billion, contributed mostly to the increase in local revenues for that period.
External sources such as the internal revenue allotment share of LGUs, excluding barangays, accounted for 63 percent of their revenue source as of the third quarter of 2019, which amounted to P348.79 billion.
The DOF said underscoring the need to pass Package 3 of the comprehensive tax reform program, which aims to institute reforms in the country’s land valuation system, is the LGUs’ low efficiency rate of 68 percent on real property tax collections in the third quarter.
Real property tax collections of LGUs of P57.03 billion as against the BLGF’s target of P83.76 billion is still an improvement over the 58 percent collection efficiency rate of LGUs in 2018, the DOF said.
Package 3 as outlined in House Bill No. 4664 was approved on third and final reading in the House of Representatives last November and has been transmitted to the Senate.
For 2020, the BLGF’s target is for local governments to collect about P307.08 billion in local revenues, of which P54.19 billion will come from the provincial governments, P213.71 billion from cities and P39.21 billion from municipalities.
The BLGF, an attached agency of the DOF, exercises administrative and technical supervision over the treasury and assessment operations of LGUs. It is tasked under the law to assist in the formulation and implementation of policies on LGU revenue administration and fund management.
