Because the national tax allocation (NTA) for provinces, cities and towns in the region has been reduced from P44.52 billion in 2022 to only P38.08 billion for this year, the local government units in the region must raise their tax collection.
The tax collection dropped substantially because of the pandemic since 2020 and with the reduced NTA, LGUs must adjust and find ways to efficiently generate local revenues.
The Department of Budget and Management (DBM) said earlier that the allocation for the six provinces in the region declined to P11.22 billion in 2023 from P13.11 billion in 2022 while outlay for seven cities dropped to P8.22 billion from P9.61 billion.
Tacloban City's alone, considered as the only highly urbanized city in the region, has its regional capital allocation reduced by P186 million from this year’s P1.28 billion to P1.09 billion while the region’s 139 towns will have P18.63 billion NTA in 2023, lower than the P 21.79 billion this year.
"The reduction of NTA this year is an opportunity to improve collection efficiency, review the tax base, explore public-private partnerships, and link with more financing institutions,” DBM Regional Director Imelda Laceras said in an interview.
Furthermore, Laceras said that the Local Government Code of 1991 empowers local governments to collect taxes and amend or modify tax ordinances to ensure that it is "updated and relevant."
“They have to review the tax code because maybe the assessed value of real properties has been going up brought about by development in the area. Many of our local governments in the region have not yet amended local tax ordinances,” the official stated.
More borrowings this new year
As part of a possible solution, Laceras suggested getting loans from banks and going into public-private partnerships ase good strategies to finance local priority projects as LGUs now have to work on a tight budget.
“If other local governments are doing that and it’s working, why can’t the others follow the same?” Laceras asked.
Former National Economic and Development Authority Regional Director and OpinYon 8 Assistant Publisher Atty. Buenaventura Go- Soco Jr. seconded Laceras pointing out that the public should not fear the possibility of an increase in tax.
“Kun na iban hit budget or it expenses then mareduce it need for more income. Then di kinahanglan mag increase it taxes. Just increase the ability to collect taxes. Baga 10 percent man la an reduction so pwede ito ma recover with more efficient tax collection hin taxes nga local,” Go-Soco said.