EFFECT FAIR SHARE OF NAT’L TAXES TO LGUS
Business To Pay Taxes Where They Generate Income
Escudero said that he and his presidential running mate Sen. Grace Poe will ensure the full implementation of a provision in Republic Act No. 7160, or the Local Government Code of 1991, which states that LGUs should have a 40-percent share from the national government’s internal revenue collection.
He lamented that up to now the national government has failed to comply with the revenue-sharing provision of the 25-year-old law as shown by the huge amount of unpaid Internal Revenue Allotment (IRA) to LGUs amounting to P600 billion.
“Layunin po naming tiyakin na ang parte o share ng LGUs ay tumutupad sa Local Government Code at umabot sa 40 porsyento dahil sa hinaba-haba ng panahon ay dapat matagal na hong nag-40 porsyento iyon,” Escudero told officials and employees of the General Santos City Hall during their weekly flag-raising ceremony recently.
Escudero said that under the Poe-led “Gobyernong may Puso,” the IRA intended for LGUs will be released on a timely manner to help propel the economic development of provinces, cities, municipalities and barangays across the country.
He said the LGUs will also be given “full autonomy” in the delivery of basic services such as health, education, agriculture and public works, among others.
The 40 percent share of the LGUs is distributed as follows: 23 percent for provinces, 23 percent for cities, 34 percent for municipalities, and 20 percent for the barangays.
At present, there are a total of 81 provinces, 114 cities, 1,490 municipalities and 42,028 barangays nationwide.
Escudero said that under the law, LGUs are also given the authority to generate their own revenues through local taxes and fees.
He, however, said the situs taxation provision in the Local Government Code needs to be amended so that businesses will be obligated to pay their local taxes in municipalities where they operate instead of where their main offices are located.
“It is only equitable for businesses to pay taxes where they generate their revenues,” he pointed out.
Escudero said the Poe administration will also continue to implement the bottom-up budgeting process to make sure that funding requirements for the development needs of LGUs are included in the budget proposals of line agencies./MP