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

Fifteenth Congress
First Regular Session

2763

HOUSE BILL NO.

Introduced by: Honorable George P. Arnaiz

IATORY 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 government units. This is so because
government 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 but 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 government units
shail 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
government units, in addition to the internal revenue allotment, have
share of forty percent (40%) of the gross collection derived by the
national government 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
forty 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 government units. The bill, therefore seeks to
mandate natural and/or juridical persons, who are engaged in both
government 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 government units
shall receive their just share from taxes levied upon the national
wealth,

Approval of this bill is urgent) festly recommended.


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

Fourteenth Congress
First Regular Session

2763

HOUSE BILL NO. ~ ©

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
CERTAIN 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 Government Units.
Local Government units, in addition to the internal revenue
allotment, have a share of forty percent (40%) of the gross
collection derived by the national government 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,