Of national taxes and corruption in local governments

This April 4, 2022, the Bureau of Internal Revenue (BIR) drums up its appeal for taxpayers in Catanduanes to file and pay for their 2021 Income Tax Returns before the April 18 deadline.

The new Virac Revenue District Officer, Maria Cristina Yuson, and her competent staff, are optimistic that they would be able to achieve their goal of collecting a total of P656,687,000.00 by the end of the year.

Some doubt, however, cannot be discounted as this year’s goal is almost 21% higher than the 2021 goal of P543 million, which RDO 69 barely surpassed with a margin of just over two percent.

It is likewise P155 million more than the P501 million that Catanduanes taxpayers paid in 2020, records would show.

RDO Yuson says the majority of the local BIR’s revenue collection is contributed by local government units through their withholding taxes from their contracts and purchases.

Most likely, the considerable increase in the revenue collection goal is due to the additional funding of LGUs as a result of the Supreme Court’s Mandanas-Garcia ruling.

To prepare for the handover of devolved functions of national government agencies, the LGUs have been told to prepare their respective Devolution Transition Plans, which include the identification and implementation of priority programs and activities relative to the devolved functions and services.

With the devolution process expected to last until 2024, LGUs are now preparing for the hiring of additional personnel for the expanded roles and responsibilities as well as capacitating existing personnel to handle these new functions.

However, there is a shadow hanging over local governments: the projection that their National Tax Allotment (NTA) shares would decrease in 2023 and 2024 due to the effects of the COVID-19 pandemic.

Thus, they have been asked to identify possible revenue sources to address the shortfall.

And it is in this aspect that the LGUs, particularly in this Happy Island, would fail.

Majority, if not all, of the LGUs on the island are heavily dependent on national funding.

Even the center of trade and commerce, the capital town of Virac, has not been able to make a significant progress in this regard.

In 2020, its tax revenue of P43 million and income from business and services of P26 million paled in comparison to the P217 million IRA it received from the national government.

There is even doubt among governance experts that the LGUs and its leaders, mired as they are in divisive and self-serving politics, are capable of taking over the devolved functions, including the construction of school buildings.

And there lies the problem.

You see, many local leaders welcomed the budget windfall with glee, not because the LGU would finally take a direct hand in delivering various services to their constituents but for the manna that these projects and programs would drop into their own pockets.

Bloated budgets and programs of work that pork-driven development plans entail would eventually reduce the impact of the devolved funding from the national government by limiting the number of projects that the funding would be able to cover.

Corruption, not only in the national government but more so in the more numerous LGUs from provinces and cities down to municipalities and barangays, will negate whatever gains the Mandanas-Garcia ruling petitioners expected.

That is why the May 9, 2022 local elections are crucial for the candidates for chief executive: victory gives them a real chance of recouping their ‘investments’ in three years.

That is also the reason why the BIR here would most likely reach its tax collection goal, thanks to the LGU’s ‘enhanced’ contracts and purchases while the people will not get the full value of their taxes.

There is a bright spot in the gloom, however: the Catanduanes State University, where President Patrick Alain Azanza is in the midst of a campus-wide campaign to instill good governance by setting an example by himself and through no-nonsense implementation of infrastructure projects.

It’s just a pity that there are very few candidates with Azanza’s character who are offering themselves for true public service.

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