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

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