Treasurers and assessors of local government units were ordered to improve their tax collection after the Department of Finance observed their lax performance due to Internal Revenue Allotment or IRA-dependence.

In its official website, the DoF reminded the revenue generators to step up local tax collection efforts by updating the schedule market values (SMVs) for real property tax collections, improve information sharing with the Bureau of Internal Revenue (BIR) to review tax payments of business, and making a scorecard for LGU treasurers and assessors for greater accountability in collections.

Purisima said that internal revenue allotment (IRA) dependence has led many LGUs to become lax on their performance, adding that as of 2011, 21 of 122 cities and 631 of 1,512 municipalities, and 51 of 80 provinces derive over 80 percent of their revenue from IRA.

Purisima also urged local government assessors to update the SMVs, which is the basis for real property taxation.

From 2009 to 2010, Purisima said real property tax at the city, municipal, and provincial level had negative collection growth rates, with an average -9.8 percent decline across all three levels.

Like real property taxes, business tax collection shrank from 2009 to 2010 for cities, provinces and municipalities. Cities and provinces, however, have posted increases from 2010 to 2011 given currently reported collections.

Provincial business tax rose from P653 million in 2009 to P814 million in 2011, while cities collected at least P27.4 million in 2011 compared to P26.3 billion in 2009. Municipal business tax collections are currently reported at P3.59 billion in 2011, from P4.99 billion in 2009.*