COA cites higher tax collections in ARMM

The Autonomous Region in Muslim Mindanao (ARMM) has earned plaudits from the Commission on Audit (COA) for increasing its collection of local taxes, fees and other revenues to over P764 million in 2010.

The COA said this represented a 14-percent increase from its 2009 revenue collection and was achieved despite low economic activities in ARMM, lower Bureau of Internal Revenue collections, and the implementation of the law exempting minimum-wage earners from paying taxes.

The COA attributed the improved revenue collection to the Office of the Regional Treasurer, headed by Kanggo Umal, who it said deserved plaudits for the feat.

Boost collections

ARMM’s total collection from regional taxes, fees and charges, and its share from the national internal revenue taxes and other regional revenues amounted to P764.74 million in 2010, higher than the P669.89 million collected the previous year.

The COA noted that to boost revenue collections, ARMM officials conducted tax campaign activities; improved the modes of tax withholding and remittance arrangements; focused more on identification and pursuit of collection claims, such as shares from taxes paid by large taxpayers and regional tax from the National Power Corp., and coordinated with national and regional line agencies and local government units.

Wasted funds

But the COA also found that P3 million in loans that the Department of Trade and Industry extended to three nongovernment organizations went to waste.

It said the funds, which were intended for projects meant to help the poorest of the poor, were wasted because of a deficient contract with the NGOs.

The volatile peace and order situation in the target area was also a factor for the nonimplementation of the projects. It also found that the NGOs that received the money had stopped operating and could no longer be located.

Defective contracts

According to the COA, the P3 million in loans under the DTI’s Tulong sa Tao Self-Employment Loan Assistance went to Canibungan Multi-Purpose Cooperative in Basilan, the Basak Multi-Purpose Cooperative in Basilan, and the Maguindanao Agri-Link Multi-Purpose Cooperative in Maguindanao.

The loan guidelines provided for the payment of the loan within a three-year period.

But the COA said the memorandum of agreement between the NGOs and DTI-ARMM did not contain provisions on how the principal amount of the loan, interest and penalties would be settled by the NGOs.

“So the contract lacks one of the important elements, which is the ‘cause or consideration’ and therefore said contracts are all vitiated or defective,” it said.

Legal action

It further said that because of the deficiencies in the contracts, the NGOs failed to implement the intended programs since they were not obliged to under the circumstances of the contract.

“So the constituents in the granted areas did not get the value of their monies as nobody was benefited. It has not changed the economic life of the people in the areas,” it lamented.

The COA recommended that the ARMM government initiate legal action against the signatories to the MOA so the money could be recovered.