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PIA Press Release
2007/10/26

First int'l confab on local gov't finance opens in Negros Oriental

by Rachelle M. Nessia

Dumaguete City (26 October) -- The spotlight is on Negros Oriental as the province hosts the first ever-international conference on local government finance on October 29 to 30, 2007.

A gathering of more than 500 governors, assessors, treasurers and mayors are expected to participate in the conference at the Negros Oriental Convention Center, Capitol Area, Dumaguete City.

Pres. Gloria Macapagal-Arroyo will grace the conference's opening with a Keynote Speech in the afternoon of October 29.

Negros Oriental Gov. Emilio C. Macias II and Counsellor and Deputy Head of Mission-German Embassy Manila Pit Heltmann will both give their welcome addresses.

Also expected to talk during the conference are Finance Secretary Margarito B. Teves, Congressman (2nd District) George P. Arnaiz, Tanzania TRA Dar es Saalam Commissioner General Harry Kitillya, Local German Development Cooperation (GTZ) Team Leader Ernst-Dieter Fuchs, GTZ Manila Program Manager Dr. Herwig Mayer, and Chief IT Consultant Jürgen Seelmann.


A gift

The German government has earlier picked Negros Oriental as its pilot province for the Integrated Taxation System (iTAX), a German-developed software that has reportedly been successful at raising local government revenues in Germany and other countries such as Tanzania.

The software, said Fuchs, is a gift to the Philippines from the German government.

Gov. Macias, in a press conference, disclosed that an agreement was struck between the two governments, with the nod of the Sangguniang Panlalawigan.

The taxation system will be implemented in batches in the province starting with Bayawan City, Valencia, Zamboanguita, Pamplona, Dumaguete, Mabinay, Manjuyod, Bindoy, Amlan, San Jose and Sibulan as the 11 LGUs composing the first batch.

Eventually, the system will roll-out to cover all LGUs in the province, creating a vast computerized network of tax assessment and collection system.

iTAX was developed solely for local communities to help increase their revenues. "In Germany, 95 percent of the budget of the local governments comes from local taxes. In the Philippines, only around 30 percent come from local taxes," Fuchs said.

GTZ in a report revealed that up to 90 percent of the budget of most local government units in the country are from the Internal Revenue Allotment (IRA) from the national government.

The report pointed to the untapped potential for high revenues from local government taxes like real property and business taxes.

The governor said that the LGUs here have heavily depended on the IRA for its budget. "We have missed on the real estate and other taxes that we can raise locally," he said.

But with iTAX, the Governor has high hopes that the system will increase local revenue income.

Macias disclosed that about 80 percent of Negros Oriental's budget comes from IRA.

Meanwhile, Bayawan City Mayor German Saraņa admitted that Bayawan has a tax delinquency of 48 percent or P8M.

The town of Valencia, on the other hand, has a 60 percent tax efficiency rate or roughly P3M but "this is not nice. We can do much, much better," said Valencia Mayor Rodolfo Gonzalez Jr.

Recently, Pres. Gloria Macapagal-Arroyo disclosed that the national government has been able to generate large revenues unprecedented in history, cut down tax cheats, strengthen the peso and move the stock market.

"And no one thought that we could bring our budget deficit down, pre-pay our debts and raise employment, but we have," she stressed, adding that with this development the Philippines is on a path to permanent economic growth and stability. (PIA/RMN) [top]

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