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

HOUSE OF REPRESENTATIVES

House BillNo, 791

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

Explanatory Note

This legisiative measure seeks to amend Sections 284 and 286 of
Republic Act 7160, otherwise known as the Local Government Code of 1991

Under this bill, the local government units are entitled to a forty percent
(40%) share of national taxes. This is consistent with the mandate under Article
X, Section 6 of the 1987 Constitution that “Local government units shall have a
just share, as determined by law, in the national taxes which shall be
automatically released to them.”

Furthermore, it is proposed that the share of each local government unit
shall be released, without need of any further action, directly to the provincial,
city, municipal or barangay treasurer, as the case may be, on a monthly or
quarterly basis within five (5) days after the end of each month or quarter. Said
share shall not be subject to any lien or holdback that may be imposed by the
Central government.

The internal revenue allotment (IRA) of local governments has been the
lifeblood of many of them as far as operations at the local level is concerned.
The IRA shares, as contemplated in the proposed amendments, are enhanced
and broadened to include sharing in national taxes. Broadening the share of
local governments to go beyond internal revenue and to include alll taxes, is one
of the more radical amendments being proposed.


This is consistent with the promotion and enhancement of local financial
autonomy.

The approval of this bill is therefore, eamestly requested.

RUFUS B. RO! EZ

wextuok Cooracues, JR.


FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )

First Regular Session )
HOUSE OF REPRESENTATIVES
oan.
House Bill No. _ 701

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

AN ACT
AMENDING SECTIONS 284 AND 286 OF REPUBLIC ACT 7160, OTHERWISE
KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991 ENTITLING LOCAL
GOVERNMENT UNITS TO A FORTY PERCENT (40%) SHARE IN THE
NATIONAL TAXES COLLECTED.

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

SECTION 1. Section 284 of RA 7160 is hereby amended and shall read as
follows:

Section 284. (Allotment) SHARE of (Internal Revenue) NATIONAL
taxes. UPON APPROVAL OF THIS CODE, AS AMENDED, (L) local
government units (shall have a) ARE ENTITLED TO A FORTY PERCENT
(40%) share (in the) OF national (internal 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, forty percent (40%). 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 liga, to make the necessary
adjustments in the internal revenue allotment of local government units but


in no case shall the allotment be less than thirty percent (30%) of the
collection of national internal revenue taxes of the third fiscal year
preceding the current fiscal year: Provided, further That in the first year of
the effectivity of this Code, the local government units shall, in addition to
the thirty percent (30%) internal revenue allotment which shall include the
cost of devolved functions for essential public services, be entitled to
receive the amount equivalent to the cost of devolved personal services.)

SECTION 2. Section 286 of RA 7160 is hereby amended and shall read as
follows:

Section 286. Automatic Release of Shares. - (a) The share of each
local government unit IS CONSIDERED OBLIGATED AND IT shall be
released, without need of any further action, directly to the provincial, city,
municipal or barangay treasurer, as the case may be, on a MONTHLY OR
quarterly basis within five (5) days after the end of each MONTH OR
quarter, (and which )

(B) SAID SHARE shall not be subject to any lien or holdback that
may be imposed by the (national) CENTRAL government for whatever
purpose.

((b)) (C) Nothing in this Chapter shall be understood to diminish
the share of local government units under existing laws.

SECTION 3. All laws, decrees, executive orders, proclamations, rules and
regulations, or parts thereof inconsistent herewith are hereby repealed or
modified accordingly.

SECTION 4. Separability Clause. - If any provision of this Act is held invalid or
unconstitutional, the other provisions not affected hereby shall remain valid and
‘subsisting.

SECTION 5. This Act shall take effect fifteen (15) days after its publication in at
least two (2) national newspapers of general circulation.

Approved,