TACLOBAN CITY – Local government units (LGUs) in Eastern Visayas are encouraged to improve their local tax collection with the P6.44 billion reduction in the 2023 national tax allocation (NTA) for provinces, cities and towns in the region.

With the tight budget, local governments have to adjust and find ways to efficiently generate local revenues, said the Department of Budget and Management Regional Director Imelda Laceras.

“The reduction of NTA this year is an opportunity to improve collection efficiency, review the tax base, explore public-private partnerships, and link with more financing institutions,” Laceras said in an interview Thursday.

The official said the Local Government Code of 1991 empowers local governments to collect taxes and amend or modify tax ordinances to ensure that it is “updated and relevant.”

“They have to review tax code because maybe the assessed value of real properties have been going up brought about by development in the area. Many of our local governments in the region have not yet amended local tax ordinances,” Laceras added.

Entering loans with banks and public-private partnerships are good strategies to finance local priority projects, according to Laceras.

“If other local governments are doing that and it’s working, why can’t the others follow the same?” Laceras asked.

The DBM regional office disclosed that the national revenue this year was reduced to P38.08 billion from P44.52 billion in 2022 due to a drop in taxes collected by revenue agencies at the height of the pandemic in 2020.

Local government units must work on a lower budget because of a decline in tax collections in 2020. In computing the NTA, the national government uses the base period of the three years preceding.

The allocation for the six provinces in the region declined to P11.22 billion in 2023 from P13.11 billion in 2022 while outlay for seven cities dropped to P8.22 billion from P9.61 billion.

In Tacloban City alone, the regional capital allocation dropped by P186 million from this year’s P1.28 billion to P1.09 billion.

The region’s 139 towns will have P18.63 billion NTA in 2023, lower than the P21.79 billion this year.

“The decrease in the share of local governments nationwide is about 14 percent. The situation is irreversible,” Laceras added.

The share for each province, city and town varies depending on the population and land area.

Laceras said the 2022 allocation of local government shot up due to higher government earnings in 2019, a year before the pandemic.