Local government units (LGUs) that collect their taxes efficiently may soon avail of a special fund to finance their local development projects, programs and activities, once a bill filed by Sen. Panfilo “Ping” M. Lacson is passed into law.
Senate Bill 405, which Lacson filed last July 9, mandates the allocation of one percent of total Value-Added Tax (VAT) collections to finance such local development projects – and could motivate other LGUs to improve their tax collection as well.
“This bill intends to incentivize local government units (LGUs) that consistently achieve their revenue collection targets and substantially contribute to the national coffers. Such incentives are designed to serve as motivation for LGUs to facilitate business operations and reduce barriers for small entrepreneurs, hence, further enhancing tax collection efficiencies,” Lacson, a champion of LGUs, said in his bill titled “The Local Government Development Fund Act of 2025.”
“Giving the LGUs the necessary wherewithal to be active participants in the development of our country will contribute to dismantling the culture of mendicancy and political patronage that viciously thrive in our system. Ultimately, this will help in the realization of the elusive inclusive growth that the Filipinos all aspire for as a nation,” he added.
In Filipino: Panukala ni Ping Lacson, Magbibigay ng 1% Share ng VAT Collection sa LGU Development Projects
Skip to PDF contentUnder the bill, a special fund known as the “Local Government Development Fund (LGDF)” will be allocated to LGUs that have proven tax collection efficiency, thus contributing to the growth of the economy.
Lacson said the LGDF shall be made available exclusively to LGUs that attained an increase of at least ten percent in their respective VAT collection performance in the immediately preceding fiscal year of the release of the LGDF, as certified by the Bureau of Local Government Finance (BLGF) and validated by the Department of Finance ((DOF).
“To ensure meaningful alignment of funds that is reflective of the needs of the communities, the LGDF shall be used solely for developmental projects, activities, and programs (PAPs) based on the LGUs’ approved Comprehensive Development Plans (CDPs),” Lacson stressed.
He said the LGDF shall be sourced from and equivalent to one percent of the total actual VAT collections, as determined by the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) based on the third fiscal year preceding the current fiscal year.
The amount corresponding to the LGDF shall be included in the General Appropriations Act (GAA) and shall be released directly to the LGUs by the Department of Budget and Management (DBM), he added.
Lacson’s bill also provides for a capacity-building mechanism to ensure LGUs have the capacity to properly use the LGDFs. Such a mechanism will “enhance local governance, improve the delivery of public services, and strengthen accountability among local governments,” he said.
The bill also provides for a web-based monitoring system for programs to be funded by the LGDF. An initial P100-million funding will be allocated for the monitoring system.
In effect, Lacson said his bill seeks to institutionalize “rational and equitable management of resources for LGU development while allowing for a fiscal environment that fosters self-sufficiency and independence.”
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Panukala ni Ping Lacson, Magbibigay ng 1% Share ng VAT Collection sa LGU Development Projects
Magkakaroon ng dagdag na insentibo ang mga local government units (LGUs) na mabisa ang pagkolekta ng buwis, matapos maghain si Sen. Panfilo “Ping” M. Lacson ng panukalang batas na magbibigay ng special fund para sa kanilang local development projects.
Sa Senate Bill 405 ni Lacson, ilalaan ang isang porsyento ng Value-Added Tax (VAT) collections para sa mga local development projects – na maaaring mag-udyok sa ibang LGU para pagbutihin ang kanilang pagkolekta ng buwis.
“This bill intends to incentivize local government units (LGUs) that consistently achieve their revenue collection targets and substantially contribute to the national coffers. Such incentives are designed to serve as motivation for LGUs to facilitate business operations and reduce barriers for small entrepreneurs, hence, further enhancing tax collection efficiencies,” ani Lacson, na sumusulong sa kapakanan ng mga LGUs, sa kanyang panukala.
“Giving the LGUs the necessary wherewithal to be active participants in the development of our country will contribute to dismantling the culture of mendicancy and political patronage that viciously thrive in our system. Ultimately, this will help in the realization of the elusive inclusive growth that the Filipinos all aspire for as a nation,” dagdag niya sa kanyang panukalang may titulong “The Local Government Development Fund Act of 2025.”
Sa ilalım ng panukala ni Lacson, magkakaroon ng special fund – ang “Local Government Development Fund (LGDF)” – na ilalaan sa mga LGU na maganda ang pagkolekta ng buwis at nakatulong sa paglago ng ating ekonomiya.
Ani Lacson, ang LGDF ay eksklusibo na para sa mga LGU na nakakamit ng hindi bababa sa 10% na paglago sa kanilang VAT collection performance – na papatunayan ng Bureau of Local Government Finance (BLGF) at Department of Finance (DOF).
“To ensure meaningful alignment of funds that is reflective of the needs of the communities, the LGDF shall be used solely for developmental projects, activities, and programs (PAPs) based on the LGUs’ approved Comprehensive Development Plans (CDPs),” giit ni Lacson.
Ang pondo sa LGDF ay manggagaling sa isang porsyento ng VAT collections, na itatalaga ng Bureau of Internal Revenue (BIR) at Bureau of Customs (BOC).
Isasama ang halaga para sa LGDF sa General Appropriations Act (GAA) at diretsong ibibigay sa mga LGU ng Department of Budget and Management (DBM).
Kasama sa panukala ni Lacson ang mekanismo para sa capacity-building, para tiyaking kayang gamitin ng LGU ang LGDF. Mapapabuti dito ang local governance, at ang paghatid ng serbisyo publiko habang palalakasin ang pananagutan sa mga LGU, ani Lacson.
Magkakaroon din ng web-based monitoring system para sa mga programang popondohan ng LGDF. Magkakaroon ng inisyal na P100 milyong pondo para sa sistemang ito.
Dahil sa kanyang panukala, dagdag ni Lacson, mai-institutionalize ang “rational and equitable management of resources for LGU development while allowing for a fiscal environment that fosters self-sufficiency and independence.”
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