LGUs told to boost revenue generation through digitalization

Finance Secretary Carlos Dominguez III has called on local government units (LGUs) to adopt digital technologies in tax administration and their other business processes in order for them to build their revenue generation and mobilization capabilities under the new normal.

Dominguez assured local executives that the Department of Finance (DOF) and its attached agency–the Bureau of Local Government Finance (BLGF)–are prepared to support their respective LGUs in modernizing and professionalizing the local treasury and assessment service, and in helping them with their digital transition initiatives.

“We have seen the future and it is fully electronic. We owe our constituents digital transformation of local governance,” Dominguez said in his pre-recorded keynote speech at the BLGF Stakeholders Recognition Program held Tuesday morning at the Clark Freeport Zone in Pampanga.

The event, which is part of the BLGF’s yearend program under Executive Director Niño Raymond Alvina, recognized the top performing LGUs in local revenue generation for 2020.

Dominguez congratulated this year’s top performers for “continuously innovating, improving and sustaining your operations to provide the best services to your constituents.”

He said that with the revenue share in national taxes of LGUs due to increase dramatically starting next year, the local governments will be primarily responsible and accountable for providing their constituents with the basic services and facilities fully devolved to them.

These expanded responsibilities devolved to them mean that LGUs have to beef up their revenue collection and absorptive capacities as they build their way towards becoming self-reliant communities, Dominguez said.

LGUs will also play a key role in the country’s economic recovery that is now gaining momentum as provinces, cities and municipalities are expected “to lead in the grassroots planning, community infrastructure, and the initiation of more linkages to the economic mainstream on behalf of their constituents,” Dominguez said.

To accomplish these tasks, Dominguez said LGUs should adopt electronic facilities for business registration and renewal, as well as for the assessment and collection of local taxes, fees and other charges.

The local treasurers, for their part, should start linking up with the online payment facilities already offered by government financial institutions (GFIs), which also serve as their depository and servicing banks to ensure safe, efficient and convenient ways of transacting with LGUs under the new normal, Dominguez said.

“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,” Dominguez said.

He said the national government and the LGUs need to work together in improving revenue generation and tax administration to make the country’s fiscal resources last amid the pandemic.

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

Dominguez said that when the pandemic struck, Filipinos relied on LGUs as the main implementors of public health regulations and as channels for the distribution of subsidies to the most vulnerable of their communities.

The LGUs were also at the frontlines of the COVID-19 vaccination drive, with many of them performing “heroically, saving lives and providing for the medical care of the afflicted,” he added.

“We will continue relying on the local governments for all the vital things that need to be done as we move from a pandemic to an endemic condition. Constant monitoring of our communities, continuous contact tracing, and the administration of booster shots will continue in the years ahead. They will be integral to the functions of the local governments,” Dominguez said. (DOF)