Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon, City

FIFTEENTH (15™) CONGRESS
First Regular Session

361
HOUSE BILL NO. 2361

Introduced by Hon. Ronald V. Singson

EXPLANATORY NOTE.

This bill seeks to provide for the payment to the host local government unit of its
forty percent (40%) share of the gross tax collection from the utilization and development
of national wealth, within its jurisdiction, amending for the purpose the Local
Government Code of 1991.

The rapidly changing environment requires a continuing reappraisal of the role of
local government units. This is so because local government units are a crucial factor in
national socio-economic development.

National development involves decentralization and devolution of functions and
services to the local level thus; there is a need to maximize the opportunities available
and to make adjustments in existing systems and procedures. This will enable the local
development planners to deliver services and benefits to the constituents more efficiently.

In order for the local government units to become effective in the national
development process, there is a need to continually address their fiscal capability to
implement meaningful programs and projects that will benefit not only their constituents
but the whole country, as well. The availability of enough financial resources at the
disposal of local government units serves, as the backbone of successful and responsive
projects.

Section 18 of Republic Act No. 7160 otherwise known as the Local Government
Code of 1991 mandates that local government units shall have a just share in national
taxes which shall be automatically and directly released to them without need of any
further action.

Section 290 of the same Republic Act further provides that local government
units, in addition to the intemal revenue allotment, have share of forty percent (40%) of
the gross collection derived by the national government from the preceding fiscal year
from mining taxes, royalties, forestry and fishery charges, and such other taxes, fees or


charges, including related surcharges, interests, or fines, and from its share in any co-
production, joint venture or production sharing agreement in the utilization and
development of the national wealth within their territorial jurisdiction.

This bill aims to cure the defect in the present system where the forty percent
(40%) share of the gross collection derived by the national government from national
wealth taxes is not fully remitted directly to the host local government units. The bill,
therefore, seeks to mandate natural and/or juridical persons, who are engaged in the
utilization and development of national wealth to directly pay the host local government
units their 40% share. Such a move will ensure that host local government units shall
receive their just share from taxes levied upon the national wealth.

Approval of this bill is urgently and eamestly recommended,

RONALD \V. SINGSON


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon, City

FIFTEENTH (15') CONGRESS
First Regular Session

HOUSE BILLNo.__ 2361

Introduced by Hon. Ronald V. Singson

AN ACT
PROVIDING FOR THE DIRECT PAYMENT TO THE HOST LOCAL
GOVERNMENT UNITS OF ITS FORTY PERCENT (40%) SHARE OF THE GROSS
TAX COLLECTION FROM THE UTILIZATION AND DEVELOPMENT OF
NATIONAL WEALTH WITHIN ITS TERRITORIAL JURISDICTION, AMENDING
FOR THE PURPOSE CERTAIN SECTIONS OF REPUBLIC ACT NO. 7160
OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Section 290 of Republic Act No. 7160 otherwise known as the Local
Government Code of 1991 is hereby amended to read as follows:

“Sec. 290. Amount of Share of Local Government Units. Local government units,
in addition to the internal revenue allotment, have a share of forty percent (40%) of the
gross collection derived by the national goverment from the preceding fiscal year from
mining taxes, royalties, forestry and fishery charges, and such other taxes, fees or
charges, including related surcharges, interests, or fines, and from its share in any co-
production, joint venture or production sharing agreement in the utilization and
development of the national wealth within their territorial jurisdiction:

PROVIDED: HOWEVER, THAT PERSONS, NATURAL OR JURIDICAL ENGAGED
IN UTILIZATION AND DEVELOPMENT OF NATIONAL WEALTH, SHALL PAY
DIRECTLY SUCH FORTY PERCENT (40%) TO THE HOST LOCAL
GOVERNMENT UNITS AND THE REMAINING SIXTY PERCENT (60%) TO THE
NATIONAL GOVERNMENT”.

SEC. 2. Section 293 of the same Act is hereby further amended to read as follows:

“Remittance of the share of Local Government Units. - The share of local
government units from the utilization and development of national wealth shall be


remitted in accordance with Section [286] 290 of this Code: Provided, however, That in
the case xX X X X X Xx”

SEC. 3. All laws, decrees, executive order, rules and regulations which are inconsistent
with this Act are hereby repealed, amended or modified accordingly.

SEC. 4. This Act shall take effect fifteen (15) days after its publication in at least two (2)
National newspapers of general circulation.

Approved,