Date: 1.
THE: —

ae

16" CONGRE:!
FIRST RE

OF THE Republic of the Philippines)
GULAR SESSION)

INTRODUCED BY HONORABLE GUS 8. TAMBUNT!

EXPLANATORY NOTE

The Local Government Units are the backbone of the government. They ate in the forefront of
the government in pursuing national development and progress. Indeed, they are the prime

movers of executive mandate.

Enshrined in the 1987 Constitution, Article X, Section 6 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.”

More so the Local Government Code of 1991 declares that the local government units (LGUs)

shall have a share in the national internal revenue taxes.

This legislation aims to provide fiscal independence to the LGUs and providing additional source

of funds as well. ‘The increase of 50% means more resources at the grass root level.

Itis in this light that immediate passage of this bill is earnestly sought.

omar 2014


16!" CONGRESS OF THE REPUBLIC OF THE PHILIPPINES

First Regular Session

HOUSE OF REPRESENTA HY
HOUSE BILL No. 4200

Introduced by HONORABLE GUS S. TAMBUNTING

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 fily percent (50%) share in the national taxes based on the collection of the third fiscal year
Al year: Provided, that in the event that the national government incurs an

preceding the current fis
unmanageable public sector deficit, the President of the Philippines is hereby authorized, upon the
recommedation of Secretary of finance, Secretary of Interior and Local Government, and Seeretary of
Budget and Management, and subject to consultation with the presiding officers of both Houses of

al government units, to make the necessary

Congress and the presidents of the various leagues of the lod
adjustments in the share in the national taxes of local government units but in no ease shall the share be
es of the third fiscal year preceding the

less than forty percent (40%) of the collection of national
current fiseal year

SECTION 2. As used in this Aet
(1) "Local Government Units" shall refer to provinces, eities, municipalities, and barangays:

(2) "National Taxes" shall refer to and inelude the national internal revenue taxes collected by the Bureau
ional internal revenue

of Internal Revenue, and the trilts, duties, fees, and charges, as well as the 1a

taxes, if any, collected by the Bureau of Customs

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

ION 3. The share in the nat/onal taxes created under this Act of each local government unit shall be
5 of Republic Act No, 7160.

SE
determined following the formula provided under Section



SECTION 4, Each focal
percent (20%) of its shi
of local government units shall be furnished by the Department of Interior and Local Government

overnient unit shall appropriate in its annual budget no less than Oventy

1y the national taxes for development projects. Copies of the development plans

SECTION 5. The Sec ation with the Secretary of Budget and Management,

shall promulgate the ne

tary of Finance. in con:
ssaty rurles 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 I, Title IIL o? Republic Aet No. 7160, and all laws, presidential
decrees, executive orders, letters of instruction, rules anc regulations which are inconsistent with any of

the provisions of this Act is 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 afier its complete publication in the Official

Gazette or in any newspaper of general circulation,

Approved,