Hike in LGUs' revenues share urged

MANILA, Philippines - A proposal to increase the local government units’ 40-percent share of the national revenue taxes to 50 percent by January 2015 and 60 percent from January 2016 onwards has been filed with the House of Representatives.

Rep. Francisco Matugas (1st District, Surigao del Norte) is author of HB 2619 increasing the share of LGUs in the national internal revenue taxes by amending Section 284 of Republic Act 7160 or the Local Government Code of 1991.

The Local Government Code mandates that on the first year of the law the share was 30 percent, 35 percent on the second year and 40 percent on the third year and thereafter.

“After two decades from implementation, the said (40 percent) share is deemed insufficient for local government units, particularly those belonging to lower income classifications or lower fiscal capacity, considering the enormous powers and responsibilities devolved to them,” Matugas pointed out.

This is why, he said, many LGUs have been clamouring for some devolved functions and responsibilities such as health services to be transferred back to the national government.

The Constitution, Matugas stressed, explicitly states that the LGUs shall have a just share in the national taxes.

This means that the LGUs have a right to taxes collected by the Bureau of Internal Revenue (BIR) and that LGUs receive not just a share in the national taxes but that the percentage of its share must be considered ‘just’, the lawmaker said.

The bill is now under consideration by the House Committee on Local government chaired by Rep. Pedro Acharon Jr. (1st District, South Cotabato & General Santos City).