The Department of Finance (DOF) challenged local government units (LGUs) to keep up with their target to digitalize government processes and services.

“We are challenging LGUs to keep up and digitalize their own processes and services. encourage our local governments to implement digital innovation and transformation, especially in local treasury and assessment offices,” Finance Secretary Benjamin E. Diokno. said.

The process involves adopting digital or electronic facilities for business registration and renewal, as well as for the assessment and collection of local taxes, fees, and charges.

In Fiscal Year 2021, only five percent of LGUs made efforts to accept electronic payments through the Electronic Payment and Collection System, which resulted in total collections of P1.5 billion from individuals, and total collections of P4.3 billion from businesses and corporations.

Despite the 58 percent increase in total local business tax collections in the second quarter of 2022 at P83.7 billion, and the real property tax collections at P60.68 billion or 42 percent, the total local collections from digital platforms amounted to P5.8 billion, which is only 2.3 percent of the total local collections of LGUs.

Last Oct. 25, the Bureau of Local Government Finance (BLGF), in partnership with the Asian Development Bank (ADB), conducted a seminar on best tax administration practices and new technologies for local governments.

“I hope that our local treasurers and assessors, as well as personnel from the BLGF, can apply this new knowledge,” said Diokno.

He also congratulated the top performing LGUs in FY 2021 for continuously improving and innovating the delivery of public services to their constituents.

“I am confident that we are on the right path towards making local finance broader, more sustainable, and responsive to the needs of the local constituency. This is an important legacy we shall leave behind for future generations as we rebuild our economy,” said Diokno.

Earlier, Diokno urged LGUs to strengthen their revenue mobilization capacities through real property tax collections in order to support the country’s economic resurgence.

Diokno noted that real property tax offers a progressive source of revenue for LGUs, thus they need a credible real property valuation system to help improve government's revenue generation capacity.

For this reason, the finance chief said the DOF supported the passage of the Real Property Valuation and Assessment Reform bill.

Once passed into law, the proposed measure will promote the development of a just, equitable, and efficient real property valuation system that will positively impact revenue generation and resource mobilization performance of LGUs, Diokno said.

The bill is the third package under the previous administration’s Comprehensive Tax Reform Program (CTRP).