Extent of Implementation of Revenue-Generation Strategies and Revenue-Generation Performance of The Municipalities in Ilocos Norte
Extent of Implementation of Revenue-Generation Strategies and Revenue-Generation Performance of The Municipalities in Ilocos Norte
Extent of Implementation of Revenue-Generation Strategies and Revenue-Generation Performance of The Municipalities in Ilocos Norte
(Expanded Abstract)
MASTER IN MANAGEMENT
(Financial Management)
May 2021
EXTENT OF IMPLEMENTATION OF REVENUE-GENERATION
STRATEGIES AND REVENUE-GENERATION
PERFORMANCEOF THE MUNICIPALITIES
IN ILOCOS NORTE1
Norte.
The descriptive research design was used to describe the extent of implementation
municipalities.
used to determine the revenue-generation performance. The data were analyzed and
It was found out the local government units strongly implemented the revenue
target setting strategies while the strategies for tax education and information
campaigns, tax collection enforcement, and tax collection of delinquent taxpayers were
moderately implemented.
Along the revenue generation performance from 2015 - 2019, the local
government units mostly obtained positive performance in terms of revenue growth except
In terms of locally sourced revenues to total LGU revenue, the municipalities were
The municipalities slightly performed below the benchmark in terms of annual regular
In terms of total revenue office operations cost to locally sourced revenue, the
municipalities in Ilocos Norte were able to perform better but below the benchmark.
Lastly, in terms of the real property tax collection efficiency, the municipalities were able
strategies suited for the municipality in terms of tax collection enforcement, tax
information and education and tax collection on delinquent tax payers would improve the
setting strategies guide the municipal treasurers and revenue collectors to effectively
should also develop new strategies or adopt effective strategies used by other
efficient in the collection of real property taxes, the municipal treasurer should always
monitor and update the databank of delinquent real property taxpayers and send notices
of delinquency to them effectively by asking the aid of barangay officials to deliver such
notices. If the revenue target seems to be difficult to collect, the treasurer should make
counter projections
In addition, the assessment values of the real property taxes should be revised
every three years. If the province is unable to conduct revisions on time, the municipalities
should make an appeal to the Provincial Government of Ilocos Norte to conduct such
revision for them to update the valuation of real properties to increase tax base.
INTRODUCTION
the quality of services, programs, projects, and activities undertaken. However, the
viability and sustainability of the services, programs, projects and activities depends on
Taxes and charges are imposed on both individuals and business to increase the
revenues of the LGUs and make its environment conducive to businesses and individuals.
Taxes are necessary to provide for the needs of the communities, such as infrastructure,
powers, authority, responsibilities, and resources to become self-reliant. The LGUs can
generate resources to supplement the Internal Revenue Allotment (IRA) and grants
provided by the national government. With such power, the LGUs can levy taxes, fees
and charges, and to create other sources of revenues for their exclusive use and
disposition. The imposition of taxes, fees and charges is mandated and implemented
However, there has been increasing pressure for the LGUs to generate additional
resources and to enhance efficiency in allocating the resources to provide better services,
programs, projects and activities to the communities. There are still LGUs in the country
that heavily depend on tax revenue allotment, grants, and loans to sustain operations and
to provide development to the people. Municipalities can become less dependent on the
IRA provided by the national government if collection of real property and other local
taxes increase.
To ensure the viability and the sustainability of the municipalities in Ilocos Norte,
the Provincial Treasurer’s Office (PTO) provides revenue targets in traditional sources,
2014). The municipalities in Ilocos Norte have an average percentage revenue of 71%
IRA share and 29% local revenue sources from 2009-2018. However, even the first- and
government revenues due to poor revenue generation from local sources (Bureau of Local
to the people, become less dependent on internal revenue allotment, and improve credit
worthiness, the municipalities could focus on revenue generation strategies along real
property tax, business tax, and other fees and charges. This premise provided an avenue
for the researcher, working as Disbursing Officer II at the Provincial Treasurer’s Office,
in terms of:
form resolutions, ordinances, programs, and activities to improve the revenue generation
of the province.
These results could contribute to the impact studies presented and conducted by
mobilization.
The study could provide guidance to the municipal treasurers, revenue collectors
enhance their ability to gather tax and non-tax revenues for their respective
municipalities.
The results could also enhance the researchers’ skills in identifying appropriate
Lastly, the results of the study could be a ready reference for other researchers
strategies and the performance of the municipalities in Ilocos Norte from 2015-2019. It
involved the municipal treasurers and revenue collection officers. The city treasurers of
the City of Batac and Laoag were excluded as respondents because cities have separate
revenue ordinances and taxing powers. Performance was limited to the ability of
revenue target setting, tax information and education campaigns, collection enforcement,
regular annual income to total revenue, total revenue office operations cost to locally-
sourced revenues plus education fund, and property aggregation growth. Financial data
were gathered from the electronic statements of receipts and expenditures database of the
Data analyzed and interpreted were limited only to those gathered through a
survey questionnaire from the municipal treasurers and revenue collectors in. Ilocos
Norte.
THEORETICAL FRAMEWORK
The following are the theories and principles that served as bases for the study.
These are the strategy theory and the benefit theory of taxation.
Hofer and Schendal (1978) described strategy as a game plan through which the
aims and objectives of an organizations are achieved. As cited by Chaffee (2010), Hofer’s
definition typifies the adaptive model strategy, characterizing it as concerned with the
development of a viable match between the opportunities and risks present in the external
environment and the organization’s capabilities and resources for exploiting these
opportunities. Hofer and Schendal defined revenue strategy as the fundamental pattern of
present and planned resources, and environmental interaction that indicate how the
organization will achieve its aims and objectives. It is the skill employed in managing
any affairs, which include the local government affairs, especially in the means of
generating revenue. The strategy of revenue generation must aim for the following:
ensuring the survival of local government as it relates to determine priorities and decision
federal and statutory allocation; tapping all available opportunities in their areas; ensuring
effective and efficient management of financial resources; and maximizing revenue while
According to Kagan (2019), taxation is a term for when a taxing authority, usually
a government, levies or imposes a tax. The term "taxation" applies to all types of
involuntary levies, from income to capital gains to estate and property taxes. A local tax
Musgrave (1989) stated that the taxation must take place in accordance with the benefit
Under the benefit theory of taxation, taxes are seen as serving a function similar
to that of prices in private transactions; that is, they help determine what activities the
government will undertake and who will pay for them. If this principle could
be implemented, the allocation of resources through the public sector would respond
directly to consumer wishes. The benefit principle is utilized most successfully in the
financing of roads and highways and other public utilities through levies on motor fuels
and tolls and other user fees and charges (McLure, Neumark, & Cox, 2007).
The conceptual framework of the study was anchored in the theory of strategy and
the benefit theory of taxation because the concept of these theories serves as the guide of
CONCEPTUAL FRAMEWORK
used to describe the financial status of the municipalities are the revenue generation
strategies employed by the LGUs in the Province of Ilocos Norte and their revenue
generation performance.
The revenue generation strategies employed by the LGUs were described in terms
of revenue target setting; tax information and education campaign; tax collection
These strategies were measured in terms of revenue growth; per capita growth of
income to total revenue; total revenue office operations cost to locally-sourced revenue
plus special education fund collected; and real property tax collection growth.
This part of the paper presents the methods followed in the conduct of the study
which includes research design, locale of the study, population and sampling, research
instrument, data gathering procedure and statistical treatment of data including the ethical
considerations.
Research Design
The study used the descriptive research design to describe the revenue-generation
were revenue target setting, tax information and education campaigns, tax collection
performance was determined through document analysis that showed revenue growth,
revenue, annual regular income to total revenue, total revenue office operations costs to
locally-sourced revenues plus special education fund, and real property tax collection
growth.
The research study was conducted in the Province of Ilocos Norte composed of
two component cities and 21 municipalities. The component cities included Laoag City
and the City of Batac while the 21 municipalities included Adams, Pagudpud, Dumalneg,
Bangui, Burgos, Pasuquin, Bacarra, Vintar, Sarrat, Carasi, Piddig, San Nicolas, Dingras,
Solsona, Nueva Era, Banna, Paoay, Currimao, Pinili, Badoc, Marcos. In the study the two
The population of the study were the 21 municipal treasurers and 21 local revenue
collection officers of the different municipalities in Ilocos Norte. Total enumeration was
used to include 42 local treasury employees equipped with fidelity bond to issue
accountable forms.
Research Instrument
The survey questionnaire was used to elicit information from the municipal
employed by the municipalities in terms of revenue target setting; tax information and
education campaign; tax collection and enforcement; and tax collection on delinquent tax
payers.
The research instrument was designed by the researcher and was presented to the
provincial treasurer for evaluation. It was also reviewed, face-validated, and approved by
Permission to conduct the study was sought from the provincial treasurer and local
chief executives of the different municipalities in Ilocos Norte. The study used primary
and secondary data. Primary data included the revenue generation strategies gathered
through the use of the survey questionnaire. Secondary data were retrieved from
statements of receipts and expenditures (SRE) of the municipalities from calendar years
2015 to 2019. These statements were submitted by the municipalities to the provincial
treasurer’s office and forwarded to the Bureau of Local Government Finance (BLGF).
These documents were downloaded from the electronic statement of receipt and
expenditures system of the provincial treasurer’s office in Ilocos Norte. Permission and
The consent of the respondents involved in the study was sought before their
participation and they were given ample time to understand and comprehend the items in
The data gathered were analyzed, using tables, means, and document analysis. In
to the items were made on a rating scale of 1 to 6 (e.g., not implemented to fully
implemented) and the means were interpreted using the following norms:
using the financial indicators adopted from the Bureau of Local Government Finance in
revenues to total LGU revenue; annual regular income to total revenue; total revenue
office operations cost to locally-sourced revenues plus special education fund; and real
Revenue Growth
(Total Revenues Yr1 - Total Revenues Yr0) x 100
RG =
Total revenue Yr0
education fund
Revenue Office Operations Cost x 100
TROOC =
Locally Sourced Revenues + Special Education Fund
TR, ARI-TR, TROOC, and RPTCE) of the municipalities, the values were compared to
averages to where the LGU income class belongs. These values were described as above
Ethical Considerations
To ensure that this study does not contradict ethical issues, the following measures
were done:
The researcher sought permission to conduct the study from the municipal mayors
and the provincial treasurer in the province of Ilocos Norte. It was emphasized that the
study was conducted to complete the requirements for the degree Master in Management
municipalities in Ilocos Norte, the respondent to this study, was obtained before their
participation in the study. It was also emphasized that the participation of the respondents
was voluntary.
The research instrument was presented to the provincial treasurer for evaluation.
It was designed to elicit information with due care, and that the items were not contentious
The statement of receipts and expenditures reviewed in the study were considered
public documents as they were submitted by the LGUs to the Bureau of Local
Government Finance. With the permission and approval of the provincial treasurer, these
documents were downloaded from the electronic statement of receipts and expenditures
system of the provincial treasurer’s office. Information gathered in the study were treated
with utmost confidentiality and were used solely for the purpose of the study.
Before the researcher conducted the study, the research proposal was submitted
to the University Research and Ethics Review Board for review and evaluation to ensure
SUMMARY
tax information and education campaigns; tax collection enforcement; and tax collection
municipalities for 2015-2019 of in terms of: revenue growth; per capita growth of locally-
sourced revenue; locally-sourced revenues to total LGU revenue; annual regular income
to total revenue; total revenue office operations cost to locally-sourced revenues plus
This descriptive study used total enumeration in selecting its 42 respondents who
were the municipal treasurer and local revenue collection officers of the 21 municipalities
of Ilocos Norte. A survey questionnaire was used to gather data. Financial data were
downloaded through the use of Electronic Statement of Receipts and Expenditures of the
The data gathered were analyzed through the use of the mean. Moreover,
Findings
municipalities had strongly implemented the revenue target setting indicating that these
strategies were implemented at about 85-99 percent, signifying that the municipalities
The strategies in both tax information and education campaign and tax collection
on delinquent taxpayers due to the risks involved in distraint of properties and the
revenues to total LGU revenue, annual regular income to total revenue, total revenue
office operations cost to locally-sourced revenues plus special education fund, and real
increase their performance rating in CY 2016 and 2018 due to the increase in the
collection of other shares due from the national government because the fund release of
tobacco excise taxes. In 2018, the municipalities of Pinili, Badoc, Marcos, Banna, and
Dingras gained the highest increase in the revenue growth because they were the top-
For the per capita growth of locally sourced revenues from 2015-2019, most of
the municipalities were unable to pass the benchmark due to limited local sources and
municipalities of Adams, Dumalneg, Currimao, Marcos, Solsona and San Nicolas were
able to pass the benchmark that is why they were able to improve their tax collection
municipalities were able perform slightly above the benchmark from 2015-2019. The
Pasuquin, and San Nicolas were able to pass the benchmarks during the five-year period
because their volume of collections in real property taxes and non-tax revenues were
higher than those of other municipalities in Ilocos Norte. The municipality of San Nicolas
obtained the highest rating in locally-soured revenues to total LGU revenue because it
Most of the municipalities of Ilocos Norte were able to pass the benchmark in
terms of annual regular income to total LGU revenue from 2015-2019 which implies that
their total revenues were predictable compared to other municipalities. The municipalities
of Burgos, Bangui, Pagudpud, Currimao, Badoc, Piddig, and Pasuquin were not able to
pass the benchmark because of grants, aids, interlocal transfers, and special education
Along the ratio of total revenue office operations cost to locally-sourced revenue,
majority the municipalities in Ilocos Norte were able to pass the benchmark from 2015
to 2019 which implies that they were able to mobilize their revenues effectively. The
municipalities of Adams, Dumalneg, Carasi and Nueva Era were unable to pass the
benchmark due to limited local sources which cannot sustain the financial needs of their
revenue offices.
Lastly, in terms of the real property tax collection efficiency, the municipalities
of Ilocos Norte were unable to meet their revenue targets because there has been no
revision of assessment conducted by the provincial assessor’s office since 2014. There
was also a slight implementation of strategies in the collection of delinquent taxes due to
the exhaustive process required by law. The municipalities of Burgos, Bangui, Pagudpud
and Currimao were able to efficiently collect real property taxes due to the expansion of
The municipalities in Ilocos Norte are still dependent on their Internal Revenue
Allotment (IRA) share from the national government. Other shares from the national
government, like tobacco excise tax and utilization of geothermal, hydrothermal, and
other renewable energies, contribute a lot to the revenue growth of the municipalities.
Real property taxes are the main source of tax revenues generated by the majority
of the municipalities while local economic enterprises provide a huge potential in the
municipality in terms of tax collection enforcement, tax information and education and
tax collection on delinquent tax payers will eventually increase the collection of locally-
guide the municipal treasurers and revenue collectors to effectively appropriate enough
Recommendations
Based on the findings and conclusions of the study the following are
recommended:
For the municipalities to be able to meet their targets and become efficient in the
collection of real property taxes, the municipal treasurer should always monitor and
update the databank of delinquent real property taxpayers and send notices of delinquency
to them effectively by asking the aid of barangay officials to deliver such notices. If the
revenue target seems difficult to collect, the treasurer should make counter projections to
the BLGF.
The assessment values of the real property taxes should be revised every three
years. If the province is unable to conduct revisions on time, the municipalities should
make an appeal to the provincial assessor to conduct such revision and update the
include factors that were not considered in the present study should be conducted to
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THE RESEARCHERS
graduated Magna Cum Laude and Class Valedictorian at Northern Christian College,
Laoag City in 2016 with the degree of Bachelor of Science in Business Administration
(BSBA) with Financial Management as his field of specialization. In 2018, he passed the
Service Commission for the local treasury eligibility. In 2019, he also passed the
Local Government Finance for being 9th rank among the successful examinees in the
Philippines.
Northern Christian College. He has already attended various trainings and seminars in
and March 2007, respectively, at the Divine Word College of Laoag, Graduate School of
Management Accounting in April 2002 at the Mariano Marcos State University, College
adviser to local, regional, national, and international competitions, both academic and
planning, professional ethics and work values and management and leadership, and