DBM: LGU Tax Allotment for 2023 Will Be Smaller Due to COVID

According to an official from the Department of Budget and Management (DBM), the pandemic would lessen the National Tax Allotment (NTA) for 2023.

In a seminar hosted by the Philippine Institute for Development Studies (PIDS), DBM Assitant Secretary Rolando U. Toledo mentioned how the COVID pandemic has greatly impacted the tax collection efforts of the government.

For 2022, LGUs were able to receive an increase of ₱185.17 billion, bringing the total to ₱959.04 billion. Toledo mentioned that LGUs can expect their budget or National Tax Allotment (NTA) will be smaller come 2023.

Toledo says that the NTA is based on the actual collection of the national government in the third preceding year.

“This is due to the lower revenue collection in 2020 because of the muted economic activity during the pandemic,” he says.

On the other hand, Toledo notes that marginalized, disadvantaged, and struggling LGUs will be receiving financial assistance via the Growth Equity Fund (GEF) to help them “fully and efficiently” implement their services and functions.

The GEF is under the fund allocated for LGUs that are identified with challenges such as “marginalization, unequal development, and high poverty incidence”. LGUs that fall under the eligibility requirement would be those in cities and provinces that are part of the fourth income bracket, fourth and fifth-income class municipalities, and barangays geographically located in disadvantaged and isolated areas.

Eligible LGUs would need to have their devolution transition plans approved by the Sanggunian or the local council to receive the GEF share.

Source: Business Mirror