Lacson files bill allocating 1% VAT for LGU development

Senator Panfilo Lacson has filed Senate Bill 405 to allocate one percent of total Value-Added Tax (VAT) collections to fund local development projects in the Philippines.

The bill aims to incentivize Local Government Units (LGUs) that achieve at least a 10 percent increase in VAT collection compared to the previous fiscal year, with funds certified by the Bureau of Local Government Finance and validated by the Department of Finance.

Lacson argues that such incentives will motivate LGUs to support business operations, reduce barriers for small entrepreneurs, and enhance tax collection efficiencies.

The proposed measure establishes a 'Local Government Development Fund' (LGDF) for efficient VAT collectors, with an initial allocation of PHP100 million for a web-based monitoring system developed by the Department of Budget and Management.

To ensure proper use of funds and enhance local governance, the bill includes provisions for capacity-building mechanisms to promote fiscal accountability and transparency in public service delivery.

Lacson emphasizes that this initiative will help reduce political patronage and contribute to inclusive growth across the country.