A LAWMAKER on Tuesday urged the Department of Finance (DOF) to improve the country's tax collection before increasing the real property tax.
Valenzuela City Representative Sherwin Gatchalian said the failure to update real property tax to boost local government revenues is not the primary problem as he cited a report from the DOF that 62 out of 80 provinces use outdated basis for the said levy, resulting in "limited revenues to the government" and "unjust burden to taxpayers."
"We cannot just increase real property tax without improving efficiency of tax collection… we cannot load up state coffers if we fail to collect taxes in the first place," Gatchalian said.
The lawmaker said that according to the revised Philippine Development Plan, local government units (LGUs) are "still heavily dependent" on internal revenue allotment (IRA), which comprised 60.3 percent in 2012 of the total LGU income from 62.8 percent in 2010.
Local income from levies and other non-tax sources, meanwhile, inched up to 34.9 percent in 2012 from 32.4 percent in 2010.
Gatchalian suggested that the DOF’s Bureau of Local Government Finance (BLGF) should help LGUs explore innovative methods to collect local revenues from taxes and non-tax sources.
"LGUs have to make it convenient for constituents to pay their taxes. They have to upgrade manual tax collection schemes to automated, which is faster and easier. It entails investment in a good IT (information technology) infrastructure. But LGUs, especially those with low income, cannot do it alone. The BLGF has to come in, as it is mandated to provide consultation to LGUs in terms of local taxes and real property assessment," said Gatchalian.
The lawmaker also advised LGUs and the BLGFs to look into the tax collection schemes of the US’ Bureau of Internal Revenue Service, which allows businesses and individuals to pay their levies through the internet or phone using their savings and checking accounts as well as debit and credit cards. (Sunnex)