SIXTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

RECEIV

HOUSE OF REPRESENTATIVES N es

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Introduced by Representative Rufus B, Rodriguez and Xe
Representative Maximo B. Rodriguez, Jr. _ Sd

House Bill No. 4230

EXPLANATORY NOTE

Article X, Section 6 of the 1987 Constitution provides that "local government units shall have a
just share, as determined by law, in the national taxes which shall be automatically released to
them."

Section 284, Title Ill, Chapter | of the Local Government Code of 1991 declares that the local
government units (LGUs) shall have a share in the "national internal revenue taxes."

This Bill, which | refer to as the "Bigger Pie, Bigger Slice" Bill, expands the source of funds for
LGUs by changing "national internal revenue taxes" to "national taxes", which is still, if not more,
compliant with the above constitutional mandate.

‘As front liners in the delivery of government services, LGUs have been given numerous
mandates but, most of the time, the resources to fulfill these mandates have been overlooked
and have not been coming to the LGUs.

This Bill seeks to give LGUs more resources to make them fulfill their role as front liners to their
respective constituents and it can achieve this by including in the "pie" all the collections of the
Bureau of Customs. Not only does this Bill seek to increase the source of funds given to LGUs
under the above-quoted constitutional mandate, but it also increases the share of the LGUs in
this bigger pie, from the present 40% to the proposed 50% share.

Aside from giving more resources to LGUs, another collateral result of this Bill is that it converts
the fight against smuggling into a national and grassroots concern, because the LGUs will now
be more sensitive on matters concerning smuggling operations for the simple reason that if the
fight against smuggling succeeds, the BOC's collections will increase and which, in turn, will
also increase the LGUs' share in the national taxes.

| foresee faster development and progress in the countryside with the enactment of this Bill. AS
barangays are also beneficiaries of this bill

in view of the foregoing, immediately approval of this Billis eamestly requested.

RUFUS B. RODRIGUEZ

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means ecfrs



‘SIXTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

14230

House Bill No.

AN ACT
PROVIDING FOR THE SHARE IN THE NATIONAL TAXES OF LOCAL GOVERNMENT
UNITS, AMENDING FOR THIS PURPOSE REPUBLIC ACT NO. 7160, OTHERWISE KNOWN
AS THE LOCAL GOVERNMENT CODE OF 1991

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

SECTION 1. Beginning the fiscal year following the effectivity of this Act, local government units
shall have a fifty percent (50%) share in the national taxes ("SNT") based on the collection of
the third fiscal year preceding the current fiscal year; Provided, that in the event that the national
government incurs an unmanageable public sector deficit, the President of the Philippines is
hereby authorized, upon the recommendation of Secretary of Finance, Secretary of Interior and
Local Government, and Secretary of Budget and Management, and subject to consultation with
the presiding officers of both Houses of Congress and the presidents of the various leagues of
the local goverment units, to make the necessary adjustments in the share in the national
taxes of local government units but in no case shall the share be less than forty percent (40%)
of the collection of national taxes of the third fiscal year preceding the current fiscal year.

SECTION 2. As used in this Act:

(1) ‘Local Government Units" shall refer to provinces, cities, municipalities, and
barangays;
(2) "National Taxes" shall refer to and include the national internal revenue taxes

collected by the Bureau of Internal Revenue, and the tariffs, duties, fees, and
charges, as well as the national internal revenue taxes, if any, collected by the
Bureau of Customs;

(3) "National Internal Revenue Taxes” shall include the value-added tax

SECTION 3. The share in the national taxes created under this Act of each local government
unit shall be determined following the formula provided under Section 285 of Republic Act No.
7160.

SECTION 4, Each local government unit shall appropriate in its annual budget no less than
twenty percent (20%) of its share in the national taxes for development projects. Copies of the
development plans of local government units shall be fumished the Department of Interior and
Local Government.

SECTION 5. The Secretary of Finance, in consultation with the Secretary of Budget and
Management, shall promulgate the necessary rules and regulations for a simplified


disbursement scheme designed for the speedy and effective enforcement of the provisions of
this Act.

SECTION 6, Section 284 under Chapter |, Title |Il of Republic Act No. 7160, and all laws,
presidential decrees, executive orders, letters of instruction, rules and regulations which are
inconsistent with any of the provisions of this Act are hereby repealed or modified accordingly.

SECTION 7. If, for any reason or reasons, any part or provision of this Act shall be held to be
unconstitutional or invalid, other parts or provisions hereof which are not affected thereby shall
continue to be in full force and effect.

SECTION 8. This Act shall take effect fifteen (15) days after its complete publication in the
Official Gazette or in any newspaper of general circulation.

Approved,