DOF urges LGUs to improve revenue-raising capacity

Published May 18, 2021, 2:44 PM

by Chino S. Leyco

The Department of Finance (DOF) has urged local government units (LGUs) to improve and optimize their revenue-raising capacity to generate funds for coronavirus response efforts and economic recovery program.

Finance Secretary Carlos G. Dominguez III said on Tuesday, May 18, that enhancing revenue generation powers and tax administration at both national and local levels will help the Philippines continuously build its fiscal resilience.

As the national government undertakes programs for economic recovery from the prolonged COVID-19 pandemic, Dominguez said that LGUs should also strengthen their local resource mobilization and public financial management.

“We need to optimize our revenue generation powers and improve tax administration to raise necessary funds for our COVID-19 response efforts and economic recovery program,” Dominguez said at the first meeting of the Interagency Governing Board (IGB).

Amid dwindling revenues due to economic recession, the finance chief admitted that “we stretch resources to stimulate the economy.”

For this reason, the DOF lauded an Asian Development Bank (ADB)-funded projects, Local Governance Reform Project (LGRP), which is designed to boost the revenue-raising capacity of LGUs.

Dominguez said the LGRP is both a “timely and much-needed” initiative as LGUs are at the frontline of serving vulnerable communities and the “catalysts for building a new economy,” especially during these challenging times.

Dominguez, who chairs the IGB, added that the project will help boost the revenue collection capacity of LGUs via the adoption of new digital tools and improvement of institutional development and policy support for property tax valuation and collection.

The DOF-chaired IGB was created through Administrative Order (AO) No. 40 issued by President Duterte on April 27, 2021.

This Board is tasked to implement the LGRP in partnership with the ADB, provide policy direction and exercise oversight functions over the project.

Dominguez said the IGB will play a lead role in strengthening the country’s local governance framework, ensure the attainment of the LGRP’s major outputs within its implementation timetable, and monitor the compliance of executing agencies and other stakeholders.

“The undertaking we embark on today moves forward the process of devolution envisioned in the Local Government Code of 1991,” he said.

Dominguez said the IGB’s inaugural meeting will focus on identifying the LGRP’s key deliverables for this year, along with discussing the contents of AO 40, determining the status of the project, and deciding on the appointment of official representatives to the body.