Time to update local revenue measures

Republic Act (RA) 7160 otherwise known as the Local Government Code of the Philippines empowers local governments to legislative revenue measures that will allow them to generate additional revenues which will be added to their Internal Revenue Allotment (IRA) for them to be able to come up with their annual budgets to bankroll their year-round operations. Taxes, both business and real property, among other revenue sources, are considered the lifeblood of the national and local governments for local officials to be able to implement their desired development projects and sustain the delivery of basic services to their constituents.

Further, the Code provides that local governments should update their schedule of market values every three years while their respective business taxes should be updated every five years pursuant to the rules and regulations crafted by the Bureau of Local Government Finance and other finance agencies. In terms of business taxes, local governments are authorized to fix the rates they want to charge those operating businesses in their respective areas of jurisdiction aside from other related fees and charges relative thereto.

The criteria in the distribution of the available IRA from the national government is 50 percent equitable sharing, 25 percent population and 25 percent land area, thus, local governments with bigger land area and population continue to get a lion’s share of the available resources of the national government that will be distributed to all local governments. Aside from the over 42,000 barangays nationwide, other local governments that rely on their share from the IRA are the provinces, cities and municipalities. To date, there are 1,486 municipalities, 145 cities and 81 provinces that equitably share from the available IRA for disposal by the national government.

Enactment of local revenue measures is considered the weakness of all elected local officials because they fear that once there will be an increase in the taxes being collected from the people, their political future will be compromised, thus, they are forced to take a stand against the proposal to increase the schedule of market values for their real property taxes and their business taxes to make them appear that they are pro-poor and pro-people. Those who are sponsoring proposals to reasonably increase the revenues of local governments are deemed as anti-poor or anti-people because they want to burden the people with increased taxes supposed to be beneficial to the greater welfare of their constituents as the funds to be generated will be brought back to them in the form of development projects and improvement of the delivery of basic services to the grassroots level.

On the other hand, many individuals have expressed the view that the reason why most owners of big real properties and businesses within the jurisdiction of urban and rural areas is because they just want to wreck in huge income for their own personal aggrandizement. The elite in urban and rural areas even go to the extent of drum beating the opposition to proposed reasonable tax increases because they do not want their huge income to be diminished while they continue to avail of the services being provided by the government to them. Obviously, most politicians take advantage of the weakness of people to advance their own personal and political interests in order to survivor in this highly competitive political arena.

We believe we are not in the right track if we continue to be threatened by the expected negative impact of approving updated revenue measures because we are just coddling tax evaders who want to be known as crusaders but unfortunately, they are not. We are sorry to say that the individuals and corporations who refuse to pay their taxes are the ones who have the nerve to raise their objections to pending reasonable increases in local revenue measures around the region, thus, we can conclude that they are opportunists.

While it is true that the government should provide the people with sufficient services and enough development projects to guarantee available employment opportunities and sustainable sources of livelihood, it should not be used as an excuse for the concerned local governments not to increase their existing revenue measures based on the prevailing trend of the times. Everyone has its obligation to pay to the government the right taxes so that we can take in our conscience to demand for more development projects and improved services for us to be able to decently live in our desired places.

We should be able to decipher if our officials are really upholding their pro-poor and people-oriented positions on issues or they are just taking us for a ride to advance their own personal and political interest. We should not take their positions in various controversial issues by their face value but let us learn to analyze what will be the best for the greater majority of the populace and not what will be their gain from us.

 

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