Tax Revenue In The Philippines

Introduction

Tax collection has been one of the primary instruments of the state in raising tax revenues needed to finance its spending; in carrying out its plans and objectives for economic growth and development, among other things. Revenues collected in taxes can be generated nationally or locally; with the implementation of the Local Government Code of 1991, the local fiscal administration has been able to exercise its power in creating measures for an effective income generation. The main challenge on the state and the government is how it will make the citizen follow its legitimate authority and make the people more involved in these activities. The use of promotion and encouragement rather than exercising the established penalties

show that with the implementation of the Local Government Code of 1991, Baguio city tax revenues from 1986-1994 increases, but it become evident that this is due to the increasing resources which comes from the national sources. According to their findings, half of the city’s revenue was covered by national sources during its implementation and the decrease in the level of local tax contribution had been noted which only cover 27 percent for the year 1994. The role of the international revenue allotment (IRA) in the tax revenue of the city on the following periods are supported by the research of Alipio and Tomas (1997), which focuses in the impact of LGC of 1991 in the financing and delivery of services in Baguio City for the year 1992-1996. As shown in their paper, the IRA still covers roughly half of the revenue sources of the city. The more recent research for the years 1991-2000 done by Agnir (2003) shows that average annual growth rate of IRA as a percentage of total tax revenue is still large with a 58.1 percentage. Her paper argues that, “…Baguio City local government relies primarily on tax revenue for its income to finance its needs” (2003:90), and recommends that the local government should not rely on external incomes and should develop its local source of

It will test how efficient is the local government in organizing these programs by reviewing their revenue collection for the years 2004 to 2014. This study aims to show the risks brought by the goal of tax incentive measures to raise the tax collection, which in the process may come with costs and will result to foregone revenues. It may reveal the possibility of a two-way benefit between the government and taxpayers if certain conditions are reached. Due to the assumption that this incentive promotes involvement of local taxpayers, it will likely result to higher revenues that will contribute to the growth and possible development. If these revenues will be reflected properly in the situation of the society, some problems including poverty, budget deficiency, underdevelopment, unemployment, inflation, etc., may be reduced and resolved. Plus, this project can be an example for other areas with the same economic situation and urbanization