Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS.
First Regular Session

House Bill No. oy

Introduced by CIBAC Party-List Representatives
Eduardo “Bro. Eddie” C. Villanueva and Domingo C. Rivera

AN ACT PROMOTING LOCAL GOVERNMENT EMPOWERMENT
IN ORDER TO ACHIEVE INCLUSIVE DEVELOPMENT,
AMENDING FOR THE PURPOSE SECTION 284
OF REPUBLIC ACT NO. 7160, OTHERWISE KNOWN AS
THE LOCAL GOVERNMENT CODE OF 1991

EXPLANATORY NOTE

Republic Act No. 7160 or the Local Government Code of 1991 (LGC) seeks to
empower Local Government Units (LGUs) by giving them the authority to effectively
formulate and implement their respective projects and programs by, among others,
giving them a just share in the national taxes and empowering them to create their
own sources of revenue.

The share of the LGUs in national taxes is realized through the automatic and
release of Internal Revenue Allotments (IRA) to each LGU. The IRA from the
National Government enables the LGUs to fund their respective programs consistent
with the national objective of effectively carrying out devolved functions.

Aside from their right to a just share in national taxes, LGUs are also
‘empowered under the LGC to create and broaden their own sources of revenue, by
giving them, for example, the power to tax the transfer of real property ownership.
However, many LGUs continue to suffer from limited fiscal resources, and thus, fail
to adequately provide services and programs to their constituents. To date, many
LGUs continue to rely on direct provision from the national government especially for
programs and projects that contribute to local development.


To address the issue of scarce resources faced by many LGUs, this bill seeks
to provide additional funding to LGUs by amending Section 248 of the LGC by
increasing their share in the national taxes from forty percent (40%) to fifty percent
(50%).

Given the abovementioned concems, the immediate passage of this bill is
eamestly sought.

nN
cae Vela
HON. EDUARDO “BRO. EDDIE” C. VILLANUE



UBARBRISc@rHMHAoON=

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS.
First Regular Session

5475
House Bill No.

Introduced by CIBAC Party-List Representatives
Eduardo “Bro. Eddie” C. Villanueva and Domingo C. Rivera

AN ACT PROMOTING LOCAL GOVERNMENT EMPOWERMENT IN
ORDER TO ACHIEVE INCLUSIVE DEVELOPMENT, AMENDING FOR
THE PURPOSE SECTION 284 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 284 of Republic Act No. 7160, otherwise known as the “Local
Government Code of 1991” is hereby amended to read as follows:

“SECTION 284. Allotment of Internal Revenue Taxes. —
Local government units shall have a share in the national [intemal revenue]
taxes based on the collection of the third fiscal year preceding the current fiscal
year as follows:

a) On the first year of the effectivity of this Code, thirty percent (30%);

b) On the second year, thirty-five percent (35%); and

c) On the third year and thereafter, FIFTY PERCENT (50%) [forty percent

(40%).]
XXX

SECTION 2. Implementing Rules and Regulations. — Within sixty (60) days from
the effectivity of this Act, the Secretary of Finance and the Secretary of Budget and
Management, in consultation with the Leagues of Provinces, Cities and
Municipalities, Liga ng mga Barangay and other relevant stakeholders, shall


SScoavomsons

OBVBZARGA

promulgate the necessary rules and regulations for the effective implementation of
this Act.

SECTION 3. Separability Clause. — If any provision of this Act or the application
such provision to any person or circumstances is declared unconstitutional, the
remainder of the Act or the application of such provision to other person or
circumstances shall not be affected by such declaration.

SECTION 4. Repealing Clause. - Any law, presidential decree or issuance,
executive order, letter of instruction, administrative order, rule or regulation of the
contrary to or inconsistent with any provision of this Act is hereby repealed or
modified accordingly.

SECTION 5. Effectivity. — This Act shall take effect fifteen (15) days from the date

of its publication in the Official Gazette or in at least two (2) newspapers of general
circulation.

Approved,