Press Release
March 3, 2006


Local government units will have a much bigger share in the tax collection from the utilization of mining, forestry and other natural resources under a proposed amendment to the Local Government Code (Republic Act 7160).

Senate Bill 2218, filed by Minority Leader Aquilino Nene Q. Pimentel, Jr., seeks to increase to 60 percent, from the present 40 percent, the share of provinces, cities, municipalities and barangays from the gross collection by the national government in the preceding fiscal year of mining taxes and royalties and forestry and fishery charges.

The remaining 40 percent of collection will be retained by the national government.

The sharing scheme also applies to the collection of other taxes, fees or charges, interests or fines, as well as any co-production, joint venture or production sharing agreement in the commercial utilization and development of the national wealth within the territorial jurisdiction of the LGUs.

Under the legislative proposal, Pimentel said the share of the LGUs from the use of national wealth and from any government agency or state-owned-and-controlled corporation shall be remitted to them within 10 days after the end of every quarter during the current fiscal year.

This is just one of the measures that seek to broaden the local fiscal resource generation. The intention is to make the local governments self-reliant instead of being dependent on the national government for their funding needs, Pimentel said.

The bill provides for the creation of a committee that will formulate the necessary procedures for the effective implementation of the sharing scheme between the LGUs and national government of the tax and fee collection from mining, forestry and fishery firms.

The committee will be composed of the representatives of the taxpayers, the Department of Finance, Department of Budget and Management and local government units.

In a related bill, Pimentel seeks full compliance of the national government with the automatic release to the LGUs of their 40 percent share from the collection of national taxes.

Under Senate Bill 2219, Pimentel proposed that the share of LGUs in the national taxes shall be released without the need of any further action, directly to the provincial, city, municipal or barangay treasurers. The funds shall be released within five days after the end of each month or quarter.

Pimentel said the proposed legislation is consistent with the mandate under Article X, section 6 of the 1987 Constitution that local government units shall have a just share, as determined by law, in the national taxes.

He said the Internal Revenue Allotment (IRA) of local governments has been the lifeblood of many of them as far as the operations at the local level is concerned. He said the IRA shares, as contemplated in the proposed amendments, are enhanced and broadened to include sharing of national taxes.

Broadening the share of local governments to go beyond internal revenue and to include all taxes, is one of the more radical amendments being proposed, Pimentel said.

News Latest News Feed