SIXTEENTII CONGRESS OFTIlIi 
REPUBLIC OF THE PHILIPPINES 
('irsl ['''XII/llr Scssioll 
) 
) 
) 
'13 
DEC 16 r 6 :15 
SENAT~ 
Senate Bill No. __ ~_045 
HEC/<:l\'CO BY:_ 
Introduced by Senator Aquilino "Koko" Pimentel TTl 
EXPLANATORY NOTE 
Article X, Section (, 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 
autol11ilticillly rcleasl~d to them." 
Sl~ction 2H4, Tille Ill, Chapter I of tlll' Local Government Code of 1991 declares 
that the local govl~rnment units (LCUs) shall have a share in the "national internal 
revenue tdxCS,1I 
This Bill, which I refer to as the "Bigger Pi", Bigger Slice" Bill, expands the source 
of funds for LCUs by changing "national internal revenue taxes" to "national taxes", 
which is still, if not morl~, compliant with the above constitutional mandate. 
As front lilwrs in the delivery of government services, LCUs have been given 
nUl1wrolis l1landatl~s but, most of the time, the resources to fulfill these mandates have 
bel~n overlooked ilnd have not been coming to the I,CUs. 
This Bill seeks to give !,CUs more resources to make them fulfill their roll' as 
front liners to their n~spectivc constituents. 
Tlw Bill achieves this by including in the "pie" all the collections of the Bureau of 
CustOI11S. 
Not only dol'S this Bill seek to incn'asc the source of funds given to T ,GUs under 
the above-quoted constitutional mandate, but it also increases the share of, or slice for 
I ,GUs in this biggl~r pic, from the present 40% to the proposed 50% share. 
Aside from giving more resources to LCUs, ilnother collateral result of this Bill is 
that it converts the fight against s!11llggling into a national and grassroots concern, 
bl~callse the I'CUs will now be more sensitivl' on matters concerning smuggling 
"Iwmtions for tlw simpk n~ason that if the fight against smuggling succeeds, the noC's 
collections will il1(Tl~ase ,md which, in tUI'l1, will also increase the LCUs' share in the 
national laXl~S. 
I foresl'e faster development and progress in the countryside with the enactment 
of this Bill, as barangays iln' also bl'neficimies of this bill. 
I knee, it is requested that this Bill be. enacted as soon as possible for the benefit 
of all. 
X3\~~~ 
AJU~O 'KOKO" PIMENTEL III 


SIXTEENTH CONCRFSS OF THE 
REPUBLIC 01' TilE PIllLll'l'lNFS 
) 
) 
) 
i'irsl i\cg/{/({f' eScs!>io/{ 
Tl OEl: 16 P6 :15 
SENATE 
Semtc IJiIl No,,_ 2045 
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Introduced by Senator Aquilino "Koko" Pimentel III 
AN ACT PROVIDING FOR THE SHARE IN THE NATIONAL TAXES OF LOCAL 
GOVERNMENT UNITS, AMENDING FOR TIllS PURPOSE REPUBLIC ACT 
NO. 7160, OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991 
/3e il clllie/eri 1'.11 liIe Sel/llle (/lui tile /lollse or Rcprc!>cntillives of tile Philippines in Congress 
(1!>!>clllhled: 
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SliCTION 1. Beginning the fiscal year following the effectivity of this Act, 
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local govl'l'Ilment units shall have il fifty percent (50%) share in the national taxes 
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("SN'J''') basl~d on the collection of the third fiscal year preceding the current 
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fiscill year; Provided, that in the event that the national government incurs an 
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ullmanageable ptlblic sector deficit, the Pn'sident of the Philippines is hereby 
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authorized, upon the recommenclation of Secretary of finance, Secretary of 
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Interior ancl Local Government, and Secretary of 13udget and Management, and 
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subjcct to consultation with the presiding officers of both Houses of Congress 
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and thl~ prl'siciL>nts of the various leagues of the local governm('nt units, to make 
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the neCl'ss,lI'Y adjustments in the share in the national taxes of local government 
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units but in no case shall the share be less than forty percent (40%) of the 
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collection of national taxes of the third fiscal year preceding the current fiscal 
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year. 
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SliCTION 2. As used in this Act: 
(I) 
"Local Government Units" 
shall refer to 
provinces, cities, 
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munjcipalilil~s, and barangays; 
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(2) 
"National Taxes" shall refer to and include the national internal 
revenue t'1xes collected by the Bureau oUnternal Revenue, and the tariffs, duties, 
fees, and charges, as well as the national internal revenue taxes, if any, collected 
by the Bureau of Customs; 
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"National Internal Revenue Taxes" shall include the value-added 
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tax; 
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SECTION 3. The share in the national taxes created under this Act of 
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Cilch local government unit shall bl~ determined following the formula provided 
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uncleI' S,'clion 2S5 of Republic Act No, 7160, 
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SLCTION 4. Jo:ach local government unit shall appropriate in its annual 
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budgd no less than twenty percent (20%) of its share in the national taxes for 
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d(~v(~lopnll'nt projc,,'ts. Copies of the development plans of local govcrnmc~nt 
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units sh'lll be furnished the Dcpartnwnt of Interior and Local Covernment. 
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SECTION 5. The Sccrclmy of j:inancc, in consultation with the Secretary 
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of Budget and Managc'mcnt, shall promulgate the necessary rules and 
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regulations for a simplified disbursement scheme designee! for the speedy and 
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effective ('nforcellwnt of the provisions of this i\ct. 
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SECTION 6. Section 21l,'1 undcr Chapter T, Tille rrr of Republic Act No. 
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llC,O, ,uld ,111 lilws, prl'sickntial decrees, executive orders, letters of instruction, 
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rules and regulations which arc inconsistent with any of the provisions of this 
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i\ct <He hereby repealed or modified accordingly. 
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SECTION 7. If, for any reason or rc'asons, any part or provision of this 
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i\ct sh'll! be held to be unconstitutional or invalid, other parts or provisions 
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hereof which me llot "ffccted thereby shall continue to be in full force and effect. 
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SLCTION 8. This Act shall t"ke effect fifteen (15) days after its complete 
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pu blicatiol1 in the Offici,,1 Cazelte or in any newspaper of general circu lation. 
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i\pproved,