LGUs urged to digitalize tax collection

FINANCE Secretary Carlos G. Dominguez III is urging local government units (LGUs) to digitalize their tax processes as their share of National Government revenues surge in 2022.

Local governments will have to improve revenue collection as they become more accountable in providing constituents with basic services, he said in a statement on Tuesday.

A Supreme Court ruling expands the local governments’ share in national taxes starting next year, which the Finance department said would dampen spending efficiency because the National Government usually spends at double the pace.

President Rodrigo R. Duterte in June signed Executive Order (EO) 138 which transfers a number of basic services to LGUs by 2024. With this, the government is shifting programs and projects, worth an estimated P234.4 billion, to LGUs.

Mr. Dominguez said LGUs will have to develop electronic business registration and renewal as well as local tax and fee assessment and collection.

“The local governments must keep pace with this digital transition — starting with local government finance. The new economy will be highly digitized. All future processes will occur mainly online,” he said.

More government processes are being transitioned online as mobility restrictions during the pandemic prevented face-to-face transactions.

Mr. Dominguez said the National Government and LGUs should improve revenue generation to make the country’s fiscal resources last during the pandemic.

“Even as we stretch resources to stimulate the economy, we must continuously build up our fiscal resilience,” he said.

The DoF has identified debt management as a key issue as it transitions to the next administration in 2022.

Outstanding government debt ballooned to P10.2 trillion last year from P8.2 trillion in 2019 as the state ran big deficits to respond to the coronavirus pandemic. — Jenina P. Ibanez