CLAMOR OF LGUs FOR BIGGER SHARE IN NATIONAL TAXES BACKED

Senate Minority Leader Aquilino Q. Pimentel Jr. (PDP-Laban) today backed the clamor of governors and mayors for an increase in the share of local government units in the national taxes from the present 40 percent to 50 percent to enable them to cope with the mounting costs of rendering services that have been devolved to them.

Pimentel urged the local chief executives to get the commitment of candidates for president, senators and congressmen to support this revenue sharing scheme as one of the campaign issues in the 2010 elections.

"This has always been my stand - give the LGUs a bigger share in the national tax collections. As a matter of fact, I have filed a separate bill on this sharing of revenues but this has not been taken up by Congress," he said.

The governors and mayors pressed for a 50 percent share of LGUs in the Internal Revenue Allotment (IRA) in last week's presidential forum sponsored by the Asian Institute of Management and ABS-CBN News.

Pimentel advised the local government officials to form themselves into a lobby group by promising to support national candidates who will take a stand in favor of the legislation raising the share of the LGUs in the national taxes.

The 50-50 revenue sharing between the national government and the LGUs is contained in a bill that Pimentel filed way back in 2001. It will amend the Local Government Code (Republic Act 7160) principally authored by Pimentel.

In justifying the increase, Pimentel cited for instance the LGUs need more funds to effectively manage the hospitals that they have taken over from the national government.

He said the LGUs were not given to support the operations of the devolved hospitals and pay the compensation of 45,000 health workers. Consequently, he said the national government, through the Department of Health was forced to reassume control of many of these hospitals to arrest the deterioration of health services.

Based on the Pimentel proposal, the LGUs will get a share of the collection not only of internal revenues but also of import duties on oil and other petroleum products, transportation, telecommunications and other forms of taxes.

Aside from the share from the national taxes, the LGUs are entitled under the Code to 40 percent of the fees royalties and charges that the national government imposes on the utilization of minerals, energy, water and other natural resources that are found within their territorial jurisdiction.

The share of the LGUs from the national taxes is apportioned as follows: 20 percent for barangays, 34 percent for municipalities, 23 percent for cities and 23 percent for the provinces.

Of the P1.4 trillion national budget this year, P249 billion is earmarked for the LGUs as their share of the IRA compared to P210 billion in 2008.