‘The LGUs are most happy to work with a bigger budget for their operations and digitalization will be a great help to them. We just hope that all of them will comply with the finance secretary’s suggestion.’
ONE reason local elections next year are exceedingly competitive, and in some areas even bloody, is that local government units (LGUs) stand to gain a huge windfall budget-wise from the Supreme Court’s Mandanas ruling which the Duterte administration decided to implement in 2022.
The Supreme Court ruling expands the local governments’ share in national taxes starting next year. Finance Secretary Carlos Dominguez said this would decrease spending efficiency because the national government usually spends at double the pace.
President Duterte signed Executive Order (EO) 138 last June, transferring a number of basic services to LGUs by 2024. With this, the government is shifting programs and projects, worth an estimated P234.4 billion, to local government units.
As the cities and municipalities will have more responsibilities and services to take care of, they necessarily will have to improve revenue collection as they become more accountable in providing constituents with basic services, it was pointed out by Dominguez.
This can be adequately done by full digitalization of their operations, especially property assessment, real property taxes and business taxes. The finance secretary stressed that the LGUs will have to develop electronic business registration and renewal as well as local tax and fee assessment and collection.
Dominguez said: “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.”
One good thing that happened during this COVID-19 pandemic is that the citizens, private businesses and government offices were pushed in a rush to transition online as everybody wanted to keep away from the dreaded coronavirus and so face-to-face interaction was diminished.
The LGUs are most happy to work with a bigger budget for their operations and digitalization will be a great help to them. We just hope that all of them will comply with the finance secretary’s suggestion.
