Local Governments, Civil Society, Democratization, and Development
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signicant reduction in the revenue effort of local managers, higher revenue
efforts shown by rst- and second-class provinces relative to lower-class
provinces indicate varying ypaper effects. As such, the poorer provinces (or
by extension, cities and municipalities) appear to be more satised with the
legally mandated central government dole-out.
This is not to say that lower income class LGUs do not have a revenue base.
With almost all LGUs covering a signicant area, specically a xed taxable
asset that is land, LGUs have been found to be remiss in enforcing a specic tax,
the idle land tax. Based on statistics cited by the DOF and DILG, only 5 of the 80
provinces and 8 of the 121 cities have imposed the idle land tax.21 In a recent
study, the La Liga Policy Institute cited estimates that anywhere from 1 to 94%
of agricultural lands in the country are idle (La Liga Policy Institute 2011).
Given the expanse of idle agricultural lands, this can extend to close to 10
million hectares. Thus, the Institute proposed that the LGC provision allowing
LGUs to impose tax on such idle lands be implemented, a proposal that has
already elicited support from the Department of Finance (DOF) and the
Department of Interior and Local Government (DILG) through the issuance of a
joint circular22 that mandates the implementation of the Ad-Valorem Tax on
Idle Lands.
Assuming, however, that LGUs do impose the idle land tax, the revenues to
be generated from such tax may be lower than that which the LGU would
spend given the statutory ceiling as well as the procedures that LGUs need to
follow to collect such taxes. There have been documented cases where LGUs
either spent more to collect real property taxes or had to be creative so that they
would escape the costly (nancial and political) process of land valuation.23
To some extent, the higher cost of tax collection indicates the organizational
constraint confronted by local government units.
Organizational limits
As noted by Manasan (2009), the inadequacy of tax administration in many
LGUs, could be explained by the reality that many of the personnel assigned to
the tax division are not technically equipped for their tasks, with very few
accountants in their rolls to perform the necessary auditing.
Another organizational aw is the limited operationalization of
development planning. Planning processes allow local governments to
identify the priority needs, determine the resources and programs required to
address these needs, and subsequently evaluate the extent of accomplishment
of plan targets. In short, the systematic application of development planning
enables the LGU to be more responsive. Under the LGC, development planning
is also supposed to proceed in a participatory fashion, with development
councils established from the barangay to the city/municipal levels. In their 11th
Rapid Field Appraisal (RFA), The Asia Foundation (TAF) noted:
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