Local Fiscal Administration Definition

    Local fiscal administration refers to systems, structures, processes, resources, and the policy environment government the inter-governmental and inter-local fiscal relations, affecting, among others the following:

o         the giving of allotments and grants by the national government (NG) to local government units (LGUs);

o         sharing of taxing powers between the NG and the LGUs, and among LGUs units;

o         policy on tax rates and structure;

o         revenue and expenditure planning;

o        revenue and expenditure planning;

o         revenue utilization and expenditure allocation;

o         monitoring and approval of budgets, tax ordinances and other fiscal measures;

o         policy on borrowing and borrowing instruments; and

o         appointment and supervision of local fiscal officers.

The trends in local fiscal administration are inadequacy of own-source revenue to finance basic and devolved functions and thus render LGUs dependent on transfers from the NG.  Reliance on few local taxes, particularly the real property tax and business tax; and uneven level of expenditures hence, unequal access to local public services.

With regards to the inadequacy of lgus, the national government must assist lgus in making development strategies to maximize the resources available.  In that way, lgus can somehow sustain themselves and become less dependent to national government.  It must also help in attracting investors regardless if the leaders are opposition or administration.

Lgus must not sole rely on few local taxes.  It must encourage business to pay honestly the taxes and give credit to those who pay on time.  Those who evade must be persecuted regardless if they are powerful individuals and has connecrtion to top officials.  The national government must help in regulating taxes and help in catching the big fishes.