Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

HOUSE BILL NO. 688

Introduced by: Honorable George P. Arnaiz

EXPLANATORY NOTE

This bill seeks to provide for the 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 jurisdiction, amending for the purpose the Local Government
Code of 1991.

The rapidly changing environment requires a continuing
reappraisal of the role of local goverment unis. This is so because
goverment 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 bu! the whole
country, as well. The availability of enough financial resources at the
disposal of local government units serve, 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 govemment
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
govemment units, in addition fo the internal revenue allotment, have
share of forty percent (40%) of the gross collection derived by the
national govemment 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
forly 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 goverment unifs. The bill, therefore seeks to mandate
natural and/or juridical persons, who are engaged in both govemment
and non-government 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 goverment units shall receive their just
share from taxes levied upon the national weal

24 District, Oriental Negros


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

HOUSE BILLNO. 683

Introduced by: Honorable George P. Arnaiz

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 CERT 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 Goverment Units.
Local Government units, in addition to the internal revenue
allotment, have a share of forly percent (40%) of the gross
collection derived by the national govemment from the
preceding fiscal year from mining taxes, royalties, forestry and
fishery charges, and such other taxes, fees or charges, including
related surcharges, interest, 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 REMIT DIRECTLY THE FORTY PERCENT (40%) SHARE
TO THE HOST LOCAL GOVERNMENT UNITS, AT THE SAME TIME, THE
SIXTY PERCENT (60%) SHARE OF THE NATIONAL GOVERNMENT IS
REMITTED.


SECTION 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 x x x x x x”

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which are inconsistent with this Act are hereby repealed, amended or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

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

Approved,