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Introduction

Existence of the Local Government Units in the Philippine Political System


is one of the key features of the rule of democracy in the country as this provide
people empowerment and greater opportunities for the members of the state to
exercise executive and legislative powers once elected in the position. However,
the local government units do not only function on mere human power but as well
as financial machinery. This research material would set focus on alternative
revenues raising mechanism including its necessity for its employment and
efficiency for the continuous operations of the said local government unit.

Background of the Study


Throughout our history as a colony and as a struggling Commonwealth
nation, our people at the local level had borne such imposition with patience and
perseverance under colonial rule. True, the tributes or taxes imposed on our
people forced several bloody uprisings. But they would eventually toe the line, as
it were, believing that their taxes would go back to them in terms of public works
and other community-uplifting projects.
Under the Malolos Republic, the Aguinaldo government started and
intensified the imposition of taxes too. He had asked the people’s help to
shoulder the cost of the nation’s libertarian struggle, first against Spain and later
America. It was during the American colonial administration (1901-35), when the
imposition of taxes, particularly among the local government units, became more
systematic. The succeeding periods of our history- the Commonwealth and the
advent of Independence in 1946- witnessed more tax impositions and charges
that had to be borne by our people more particularly the local folk.
Later with the passage of a series of local autonomy-oriented laws and
executive issuances, a part of the revenue imposed to boost the national treasury
under a centralized government set-up trickled to the local communities. For
instance, upon the issuance of Presidential Decree (PD) No. 144 in 1974, the
system of allocating funds to local governments, especially barangays, was
revised under the National Internal Revenue Code and related laws. Then the
barangay share from the Highways Special Fund was increased, as provided
under PD 558.r In November, 1977, PD 1240 was promulgated amending the
Real Property Tax Code to increase the share of the barangays in real property
tax collection from 5 to 10 percent of the provincial and municipal collections.
Under the LG Code of 1991, the tax share for the various LGUs has
further risen. Indeed, following the devolution of taxation powers and resources
to the local units more sources of revenue like the IRA have been duly expanded
and increased. And through the ingenuity and imagination of the local
legislatures (Sanggunians), LGUs are now coming up with more enabling
legislations to raise additional revenues for the delivery of basic services and
implementation of infrastructure and income-generating programs and projects.

BASIC PRINCIPLES
At any rate, the new taxing powers take into account the fundamental
principles that govern the LGUs’ right to enact enabling ordinances. These
principles include the following:
• The taxation shall be uniform among all LGUs:
• That taxes, fees, charges, and other impositions shall be equitable
and based on the taxpayer’s ability to pay; that they must not be
unjust, excessive, oppressive, or confiscatory; and not be contrary
to law, public policy, national economic policy, or in restraint of
trade;
• That the taxes be levied and collected only for public purpose;
• That the collection of taxes, fees, charges, and other impositions
shall in no case be let to any private person;
• That the revenue collected pursuant to the LG Code shall accrue
solely to the benefit of, and be subject to disposition by the LGU
levying tax, fee, charge, or other imposition unless specifically, and
accordingly provided; and
• That each LGU shall, as far as practicable, evolve a progressive
system of taxation. (Source: page 17 to 19 Local Finance and
Budgeting by Abletez and Chua)

Basically, all local government units in the Philippines have their sources
of funds for the continuous maintenance and performance of their respective
offices as a governmental institution and thus perform and satisfy the basic social
services needed for by the people in their jurisdiction. The Local Government
Code mandates in Section 289 that local governments shall have an equitable
share in the proceeds derived from the utilization and development of national
wealth within their respective areas, and share these with inhabitants by way of
direct benefits. In addition to this, Section 290 of the Local Government Code
provides that Local governments have a share of 40 per cent of the gross
collection of which national government derives collection from the preceding
fiscal year from numerous sources, including mining taxes, royalties, forestry and
fishery charges and other taxes, fees or charges (including surcharges, interests
or fines) from its share in any co-production, joint venture or production sharing
agreement in the utilization and development of the national wealth within the
territorial jurisdictions.
Though the Local Government Units do have their sources of revenues
from the basic taxes collected by the National government, man, by its nature,
sees these tax collection ideas as "burdening", "overworking" and "exhausting" of
which such antagonism is well demonstrated by the incidence of tax avoidance
and evasion done by certain individuals (Roget's Thesaurus). The problem now
lies on how the Government could diminish among the people such antagonistic
idea regarding taxation. In order to solve this endeavor, one theory that was
formulated was the “zero – taxation rule” in which taxes are to be totally
abolished. The substitute recommended for the abolishment of taxes is
alternative revenues raising mechanisms (though it may also be practiced in
forms of taxes, the people now have the less antagonistic idea regarding taxation
as “diminished” by the “zero-tax rule”).
In the Philippine setting, the “zero – tax rule” is not really absolutely
practiced as there are some basic taxes that serve as sources of revenues for
the government like for example real property tax and business tax. As
mentioned earlier, these taxes serve as the sources of fund together with the
different alternative revenues raising mechanism to be utilized for the growth and
development of local government units. In relation to this, the City of Dasmarinas,
the fourth city in the province of Cavite which was inaugurated in the year 2009
could be the best example of a local government unit which exhibits sustainable
growth and development and thus, is the main subject of this research material.

Statement of the Problem


Generally, this research material titled “Alternative Revenues Raising
Mechanism : Necessity and Efficiency on the Local Government Unit of the
City of Dasmarinas” seeks to set focus on the idea of alternative revenues
raising mechanism.
Specifically, this aims to clarify things based on the following questions:
1. Why is there a need for the employment of alternative revenues raising
mechanism for the local government of the City of Dasmarinas?
2. What are the sources of the alternative revenues raising mechanism of
the local government of the City of Dasmarinas?
3. How effective are such alternative revenues raising mechanism in
terms of the efficiency of the City of Dasmarinas as a local government
unit?

Scope and Delimitations


The extent of this research material would only focus on the available
theories and studies related to the main topic of this study as well as the existing
alternative revenues raising mechanism employed by the City of Dasmariñas as
supported by documents gathered from the said local government unit. The study
would also set its limits on the views and opinions provided by selected students
who studies and/or resides City of Dasmariñas when it comes to the efficiency of
the said alternative revenues raising mechanism.

Significance of the Study


This research study, more than a research material would serve its
purpose on the following:
• Residents of the City of Dasmariñas. As this research material
would provide and expound on the different alternative revenues
raising mechanism employed by the local government of the City of
Dasmariñas, the residents, most especially those directly affected by
the said alternative revenues raising mechanism, will be able to
understand the reasons behind said mechanisms and into where are
the incomes from the said mechanisms are being utilized. Further
more, if proven that said mechanism are of efficiency on the operation
of the local government unit, this study might be able to encourage the
residents of Dasmariñas City to render support on the mentioned
mechanisms.
• Other Local Government Units. Considering the continuous
growth and development exhibited by the City of Dasmariñas, other
local government units might also consider on their revenues raising
mechanism the ones employed by the local government of the City of
Dasmariñas and thus, be able to inhibit similar growth and
development of the City of Dasmariñas.
• Academe including the future students who might set focus on
a similar study. This research material might be of importance as
future sources of literature for future similar studies to be conducted by
members of the academe most specially, the students.
Presentation, Analysis and Discussion of Data

With the extensive collaboration of the researchers on the local


government unit of the City of Dasmariñas, the following data regarding on why
is there a need on the employment of the different alternative revenues
raising mechanism are set to focus and is quoted:
“With regards to the reason on why is there a need for an alternative
revenues raising mechanism, the City Government endeavors to be self-reliant,
continues exercising the powers and discharging its duties, functions, and
actively participates in the attainment of national goals. Consequently, the City
Government is empowered to generate alternative revenues raising mechanism
in supplement to its basic sources of funds in order to provide various services
that are necessary, appropriate, or incidental to efficient and effective
implementation of its development plan, program objectives, and priorities as
provided for in Sections 18, 129, 153, 154, and 155 of the Local Government
Code.
SEC. 18. Power to Generate and Apply Resources. - Local government
units shall have the power and authority to establish an organization that shall
be responsible for the efficient and effective implementation of their development
plans, program objectives and priorities; to create their own
sources of revenue and to levy taxes, fees, and charges which shall accrue
exclusively for their use and disposition and which shall be retained by
them; to have a just share in national taxes which shall be automatically and
directly released to them without need of any further action; to have
an equitable share in the proceeds from the utilization and development of the
national wealth and resources within their respective territorial
jurisdictions including sharing the same with the inhabitants by way of direct
benefits; to acquire, develop, lease, encumber, alienate, or otherwise dispose of
real or personal property held by them in their proprietary capacity and to apply
their resources and assets for productive, developmental, or welfare purposes, in
the exercise or furtherance of their governmental or proprietary powers and
functions and thereby ensure their development into self-reliant communities and
active participants in the attainment of national goals.
SEC. 129. Power to Create Sources of Revenue. - Each local government unit
shall exercise its power to create its own sources of revenue and to levy taxes,
fees, and charges subject to the provisions herein, consistent with the basic
policy of local autonomy. Such taxes, fees, andcharges shall accrue exclusively
to the local government units.
SEC. 153. Service Fees and Charges. - Local government units may impose and
collect such reasonable fees and charges for services rendered.

SEC. 154. Public Utility Charges. - Local government units may fix the rates for
the operation of public utilities owned, operated and maintained by them within
their jurisdiction.

SEC. 155. Toll Fees or Charges. - The sanggunian concerned may prescribe the
terms and conditions and fix the rates for the imposition of toll fees or charges for
the use of any public road, pier or wharf, waterway, bridge, ferry or
telecommunication system funded and constructed by the local government unit
concerned: Provided, That no such toll fees or charges shall be collected from
officers and enlisted men of the Armed Forces of the Philippines and members of
the Philippine National Police on mission, post office personnel delivering mail,
physically-handicapped, and disabled citizens who are sixty-five (65) years or
older. When public safety and welfare so requires, the sanggunian concerned
may discontinue the collection of the tolls, and thereafter the said facility shall be
free and open for public use.”

Going through the given statement, the main reason would have been for
the continuous exercise of the local government of the City of Dasmariñas of its
function as a governmental institution that renders services and facilities to its
people. Considering the present population of Dasmariñas City, which amounts
to over 700,000, excluding those people who does not render permanent
residence in the City itself yet needs to be provided with the basic services
(general security and other basic services), it can be inferred that the share
obtained by the local government of the City of Dasmariñas is not enough to
meet through the basic needs of the residents of the people and thus,
necessitates the employment of alternative revenues raising mechanism.

Moving forward on the different revenues raising mechanism employed


by the local government unit of the City of Dasmarinas, the following data were
provided by the local government unit concerned:

“1.) Service Fees and Charges


- To impose a duty, responsibility, or obligation on and the word
fee denotes paid or received for a service rendered.

a. Weights and Measures


b. Permit Fees (Mayor’s Permit, Motorized Tricycle Operator,
Building Permit Fees, and Subdivision Fees)
c. Registration Fees (Birth, Death, Marriage, Ante – Mortem Fees)
d. Clearance and Certi fication Fees
e. Zoning Fees
f. NSO Share
g. Secretary’s Fees
h. Medical, Dental, Lab Fees
i. Police Clearance Fees
j. Sanitary and Health Clearance
k. Library Fees
l. Tax Clearance Fees
m. Garbage Collection Fees
n. Violation of Ordinance
o. Inspection Fees
p. Fire Inspection Fees
q. Cemetery Operation
r. Markets (Central and Dasmarinas Bagong Bayan Market)
s. Transfer of Stalls

2. Toll and Terminal Fees


- a payment or fee exacted by the state, the local authorities, etc.,
for some right or privilege, as for passage along a road or over a
bridge.

3. Dividend Income
- Distribution of earnings to shareholders that may be in the form of
cash,stock, or property. Mutual fund dividends are paid out of income,
usually on aquarterly basis, from interest generated by afund's
investments. Also known as a dividend distribution.
(www.asia.advfn.com/money-words_term_6689_Dividend_income.html)

4. Interest Income
- The term that companies use on their income statement for
reporting the interest earned on cash temporarily held in savings
accounts, certificates of deposits, or other investments. Because the
interest wasn't part of the original investment, they record it separately, as
interest income. (www.investorwords.com/6844/interest_income.htmlv)

5. Miscellaneous Income
- Miscellaneous Income is that income realized that is not directly
related to the sale of standard products and services.

6. Capital Revenue (Sale of Fixed Assets)


- In governmental accounting, it is defined as any asset used in
operations with an initial useful life extending beyond one reporting period.
[2]
Generally, government managers have a "stewardship" duty to maintain
capital assets under their control
7. Grants and Aid
- Section 23 of the Local Government Code states that the "local
chief executive may, upon authority of the Sanggunian, negotiate and
secure financial grants or donations in kind, in support of the basic
services or facilities enumerated under Section 17 hereof, from local and
foreign assistance agencies without necessity of securing clearance or
approval therefore from any department, agency or office of the national
government or from any higher local government unit." Grants may be
sourced from local and foreign sources to support water resource
utilization and conservation projects and enforcement of fishery laws in
municipal waters, including the conservation of mangroves (Section
17b21 of the Local Government Code). Sources of these funds are,
however, only recently being developed and are not available to all LGUs.
( Primer on Coastal Resource Management. 1999. CRMP/DENR/USAID,
Cebu City, Philippines)

8. Extra Ordinary Receipts ( Share from Economic Zones – FCIE and


Share from Philippine Amusement and Gaming Corporation
(PAGCOR) / Philippine Charity Sweepstakes Office (PCSO))
With decentralization and greater autonomy, local governments are
given a great deal of responsibility and trust in handling and husbandring
of their income or appropriations including taxes and other sources of
revenues and receipts. In anticipation of such a need, the new Local
Government Code also provides for the proper management in terms of
prudent expenditures and disbursements as well as the accounting of
public funds. and with the tremendous increase in LGU finances, such
provision is imperative.”

Setting focus on the last problem of this research material regarding the
efficiency of the said alternative revenues raising mechanism when it comes
to the satisfaction or whether it serves the purpose of its existence and
employment, considering the development of the local government unit of
Dasmarinas from a Municipality to a City in the year 2009 it can hardly be said
that yes, the alternative revenues raising mechanism employed by the local
government is efficient. In addition to this, the various projects of the City of
Dasmarinas not to mention the lighted center islands, traffic signal lights,
pedestrian foot bridge with elevator, closed – circuit television cameras, efficient
city public library, and public sports complex could strongly prove that the funds
from the alternative revenues raising mechanism are being utilized in a just and
effective way for the welfare of the people.
SYNTHESIS AND RECOMMENDATION
Dasmarinas City, being one of the most populous City in the country,
could have been the best subject on exploring on the matter of alternative
revenues raising mechanism when it comes to its necessity (considering its
population, as the basis of the necessity of its employment) and efficiency of its
employment. The City government has clearly set such mechanisms in order to
provide and satisfy the basic needs of its people. Looking at the projects initiated
by the City government such as the lighted center islands, traffic signal lights,
pedestrian foot bridge with elevator, closed – circuit television cameras, efficient
city public library, and public sports complex could strongly prove that the funds
from the alternative revenues raising mechanism are being utilized in a just and
effective way for the welfare of the people. Another fact to consider on the aspect
of its efficiency is the development of the City of Dasmarinas as a mere
Municipality and now, as one of the Cities of the Province of Cavite.

The proponents of this study recommend the following matter that


primarily deals with the findings of the study:
1. That proper support from the residents of the City of Dasmarinas be
rendered on the alternative revenues raising mechanism employed by the
city government. Such matter on the mere support to be given by the
residents could go far as this would enhance and strengthen the services
that will be given by the City government of Dasmarinas into its people.
But then, mere support does not assure the efficiency of the mentioned
alternative revenues raising mechanism. Resident’s vigilance on whether
these revenues are properly appropriated must also be taken into
consideration.
2. Other local government units most especially those within the Cavite
Province might as well be able to employ in their jurisdictions some or
similar alternative revenues raising mechanism in order for them to be
able to satisfy and support their roles and function as local government
units. These alternative revenues raising mechanism might also be a key
for these local government units to deliver their services in a better and
more satisfying way to the people in their jurisdiction.
SOURCES

www.investorwords.com/6844/interest_income.htmlv
www.asia.advfn.com/money-words_term_6689_Dividend_income.html
www.dasma.gov.ph

Local Finance and Budgeting by Abletez and Chua


Local Government Code of 1991

City Council of Dasmarinas

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