MANILA — Local government units are the front-line providers of public service, and Sen. Francis “Kiko” Pangilinan wants them to get an increase from 40% to 50% of the national taxes, not national internal revenue taxes.
In Senate Bill 426, Pangilinan seeks to amend the Local Government Code (LGC) of 1991 and specify that LGUs get “national taxes” instead of the existing “national internal revenue taxes”, thereby expanding the source of funds for LGUs.
“Pinaka unang takbuhan ng ating mamamayan ang mga LGUs. Kailangang sapat ang kita para matugunan ang pangangailangan ng ating mamamayan (In times of trouble our citizens run to the LGUs first. LGUs should have enough revenues to respond to the needs of our constituents),” Pangilinan said, noting the example of Nueva Ecija Governor Ojie Umali, who has put up P200 million to buy wet palay from local farmers at P15 per kilo.
“The bill will harmonize the Constitution (which provides that LGUs have a just share in ‘national taxes’) and the LGC (which provides that LGUs get a share of the limiting ‘national internal revenue taxes’). It will also increase the LGUs’ internal revenue allotment (IRA) from the national government,” Pangilinan said.
National internal revenue taxes include income tax, estate and donor’s taxes, value-added tax, other percentage taxes, excise taxes, and documentary stamp taxes that the Bureau of Internal Revenue (BIR) may have imposed and collected.
National taxes include not only all national internal revenue taxes but also all taxes collected by the national government including customs duties and other taxes collected by the Bureau of Customs and all other government agencies.
The bill is also in accordance with the Supreme Court decision last April that recognized that the IRA allotment for LGUs must include tax collections of other agencies apart from the BIR.
The bill mandates that each local government unit appropriates in its annual budget no less than 20% of its shares from the national taxes for development projects. LGUs will also be required to furnish copies of their development plan to the Department of the Interior and Local Government.
The Secretary of Finance, in consultation with the Secretary of Budget and Management, will also be required to come up with the needed rules and regulations for a simplified disbursement to allow for prompt and effective distribution of the funds to the LGUs.
“Gusto nating ilapit ang pamahalaan sa mamamayan, at mangyayari ito kung mas maraming pondo ang mga LGUs. Itong mga klaseng reporma ang maglalapit sa mga pinuno at pinamumunuan na kapwa namang gusto ng asenso sa sariling bayan (We want to bring government closer to its people. This will happen when LGUs have more funds. These are the kinds of reforms that bring together the leaders and the led who both only want progress for our nation),” said Pangilinan.