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SC expands LGUs share of tax collections.

By Rey Panaligan

The Supreme Court (SC) has ruled that the "just share" of local government units (LGUs) should be "based on all national taxes and not only on national internal revenue taxes."

Legal circles said the SC ruling would pave the way for LGUs to receive bigger internal revenue allotments (IRAS) from the national budget.

A summary of the SC ruling released by its public information office (PIO) stated:

"The Court, voting 10-3, interpreted the basis for the 'just share' of local government units under Section 6, Article X of the 1987 Constitution as being based on all national taxes and not only national internal revenue taxes, as provided in Section 284 of the Local Government Code."

With the ruling, the SC granted partially the petition filed by Batangas Gov. Hermilando Mandanas who challenged the government's allocation of IRA to LGUs and sought the immediate release of P500 billion from customs collections.

Mandanas told the SC that the IRAs of LGUs have been withheld since 1992 in violation of Section 6, Article X of the Constitution which mandates an automatic release of the LGUs' "just share" in national taxes.

He said the government's compliance with the mandate of the Constitution is a prime requisite for the LGUs to efficiently and expediently serve their constituents through the delivery of basic services.

Under the National Internal Revenue Code (NIRC), the national internal revenue taxes include "income taxes; estate and donor's taxes; value-added tax; other percentage taxes; excise taxes; documentary stamp taxes; and such other taxes as are hereafter may be imposed and collected by the BIR."

The law that created the LGUs, Republic Act No. 7160, provides that provincial, city and municipal governments must receive 40 percent of the total national internal revenue taxes collected by the government.

The Constitution under Section 6, Article X, on the other hand, provides that the LGUs "shall have a just share, as determined by law, in the national taxes which shall be automatically released to them."

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(PIXABAY / MANILA BULLETIN)

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Title Annotation:National
Publication:Manila Bulletin
Date:Jul 4, 2018
Words:337
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