- Posted January 11, 2014 by
Philippines to increase LGUs' revenues
REPRESENTATIVE Francisco Matugas (1st District, Surigao del Norte) on Saturday said he has filed a bill increasing the local government units' forty percent share of the national revenue taxes to 50% by January 2015 and 60% from January 2016 onwards.
Matugas, however, stressed that increasing the share of Local Government Unites (LGUs) in the national internal revenue taxes, House Bill 2619 will amend 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% on the second year and 40% on the third year and thereafter.
"After two decades from implementation, the said 40% share is deemed insufficient for LGUs, 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 clamoring for some devolved functions and responsibilities such as health services to be transferred back to the national government.
The Constitution, Matugas pointed out, explicitly states that the LGUs shall have a just share in the national taxes.
This means that the LGUs have the 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 further stressed.
"Therefore, this proposed amendment to increase the share of LGUs in the national internal revenue taxes should be increased, including the Value Added Tax (VAT) being collected by the Bureau of Customs, from forty to sixty percent by the year 2016," Matugas concluded.