BIR slams provinces living off gov’t allocation

MANILA, Philippines – The shaming continues as the Bureau of Internal Revenue (BIR) called the provinces’ attention, this time, for not fully developing their local revenue base and instead relying on the national government’s allocation.

In its latest Tax Watch ad released Wednesday, June 18, BIR said that locally sourced income (LSI) of 56 of 80 provinces accounted for less than 15% of their regular income in 2013.

Aside from LSI, provinces’ regular income include Internal Revenue Allotment (IRA) and other shares from national tax collection (national wealth, economic zone, tobacco excise tax, Philippine Amusement and Gaming Corporation, Philippine Charity Sweepstakes Office or expanded Value Added Tax).

BIR said that since the Local Government Code has been enacted, local government units (LGUs) have been given the power to generate local income to fund basis services.

“However, after more than 20 years of fiscal decentralization, locally sourced income still share very little to the annual regular income of provinces. The rest of the regular income are mandatory shares from IRA and other national government revenues,” BIR said.

Sulu generated the lowest LSI at P1.04 million or only 0.1% of its regular income of P700.61 million in 2013.

Aklan generated the highest LSI at P491.76 million or 45.3 of its regular income of P1.9 billion.

Previous ads

The Tax Watch ads are part of the bureau’s name-and-shame campaign aimed at curbing tax evasion and increasing tax payments.

On June 4, BIR released an ad, claiming that many provinces were losing revenues due to an “outdated” valuation system for real property tax (RPT) assessment.

This was followed by another ad on June 11 that said that 4 in every 5 Philippine cities use outdated information for the collection of RPT.

Local autonomy can be better achieved if LGUs become self-reliant communities, BIR said in Wednesday’s ad.

“When LGUs collect low revenues, they fail to maximize their own revenue generation capacity to spend on basic services for their people,” the bureau added. – Rappler.com