Enjoining Local Officials to Participate in the Conduct of the Training on Resource Generation and Updating the Local Revenue Code

April 4, 2011 DILG MEMORANDUM CIRCULAR NO. 049-11 TO : All Governors, City/Municipal Mayors, DILG Regional Directors and Others Concerned SUBJECT : Enjoining Local Officials to Participate in the Conduct of the Training on Resource Generation and Updating the Local Revenue Code The primordial justification for the existence of local government units within the framework defined by the 1991 local government code is the rational management of the development of their respective communities. This mandate calls for the institution of a variety of relevant and responsive programs and projects, which in turn, calls for generation of adequate financial resources. At present, LGUs draw from two main sources of revenues, namely: the Internal Revenue Allotment (IRA) regularly allocated to them by the National Government and local sources that they generate on their own. It has been noted that, in general, LGUs rely heavily on their IRA and do not maximize the full potential of local sources. As a result of the financial crisis years ago, there is a predisposition that the Internal Revenue Allotment (IRA) of local governments will be dropped significantly. This scenario will somehow affect the delivery of basic services considering that majority of our local governments are IRA dependent. To minimize its adverse effect, there is a need to prepare local governments in broadening their tax base and explore avenues to enhance their collection efficiencies through updating their local revenue code. The Local Government Code authorizes the adjustment of tax rates by 10% every five years. Many LGUs have not taken advantage of this adjustment. In some extreme cases, no tax ordinance has been enacted under the expanded powers to create sources of revenue under the provisions of the Code. aAHISE The Department through its training arm, the Local Government Academy is offering a program entitled "Training on Resource Generation and Updating the Local Revenue Code" to all local government units (LGUs). The program focuses on developing the new strategies on how LGUs explore innovative ways in enhancing their financial capacities and generates more revenues that will create a robust economy and updating their local revenue code. The major output of the program is the draft local revenue code . Payment relative to the participation to the program may be authorized chargeable against local funds, subject to the availability thereof, and to the usual accounting and auditing requirements and to all pertinent laws, rules and regulations. For the information and guidance of all concerned. (SGD.) JESSE M. ROBREDO Secretary