by Alex Roldan
The present government of President Noynoy Aquino is obviously having the same problem as that of his immediate predecessor, GMA: How to rein in the country’s ballooning budget deficit. This is crucial to his inaugural speech commitments and plans that could fail if no fresh money is available. During the first half of the year, the Department of finance has already declared that the budget deficit has reached more than 160 billion pesos and analysts believe that 300 billion deficit this year is plausible.
The problem is further aggravated by the fact that most local governments cannot survive without their share of the Internal Revenue Allotment or IRA. It is sad to note that a significant portion of the annual budgets of municipalities and cities in the country, about 70 to 95 percent, comes from IRA (NCSB, 2008). Meaning, without the national government’s revenue share to the local governments, the whole country would collapse!
I have been an advocate of the improvement of the revenue generating capabilities of LGU, as they are at the forefront of nation building. But, as things stand now, the problem is real. When you examine local government budgets, most of their monies go to personnel services and maintenance and other operating expenses, while very little go to services and projects that could provide good economic dividends. As a result, many municipalities which once were economically sound have regressed, Most government investments are palliative in nature, designed to merely respond to such problems as illegal drugs, hence the need for covered courts to keep the kids away from the vice, instead of lasting investments that result to job generation and economic competitiveness in their communities.
After every election, the first thing that the new local government executives do is to plan how to spend their IRA and the small amount of their locally generated revenue. Seldom do you hear them say they intend to improve local revenue collection to finance their election promises and development plans. Sadly, most development plans are designed to be limited only to their expected incomes rather than the development needs of the place.
I know that increasing local revenue collection is nasty to the taste of those who want to survive politically. But we must realize that each year that passes sees the government budget deficit ballooning. It is already consuming half of the nation’s expected revenues and as local governments fail to improve local revenues, more borrowings are necessary while the quality of programs and services decline.
I am not saying that local governments should increase taxes to generate revenue and forget about political backlash later. What I am driving at, is for local governments to assiduously collect the correct taxes. I agree with President Noynoy’s notion that increasing taxes should not be the option. Rather, collecting the correct taxes so that local governments can increase their revenues, which I am sure can be done.
There are many ways, and one which has the most potential for local governments is real property taxes. Local governments do not need to spend to embark on reclassification of land use to increase taxes, as they need to wangle it first from local legislative bodies which take forever to decide. All they need to do is walk around and see for themselves how private properties have become sources of income for their owners. I bet, many of such properties have tax declarations as “residential”!
Look all around you, there are electric poles used for business that have never been taxed. Machineries of companies that have not been evaluated, plantations whose real property values have not been updated, etc.
No need to increase taxes, just collect what is due to the government! The same report of NCSB showed that real property collection of most municipalities and cities in the country could only amount to less than 2% of their gross revenues (including IRA), while local tax collection represents a measly 3 to 5% of their annual budgets.
I have a personal knowledge of a rich family and a company in Davao City whose properties that I am sure have been valued fairly by the city government. But, how much do they pay? I just don’t want to reveal, but they pay only a paltry of what they are supposed to pay! A lead worth pursuing by no-nonsense journalists who incessantly seek stories that are worth headlines.
More so, do we need the freedom of information bill passed by the 15th Congress.
You don’t need to be a nationalist, a socialist, a fascist or a communist to understand that it is a duty for all citizens of any country to share in building and strengthening his/her nation. You want a nation you can call your own, a government to run and develop it, then do your duty as a citizen. And paying the right taxes is one of those sacred duties of all. There are no free-riders when you talk about nation building.
Tax cheaters, go to hell!
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