Follow SC ruling on LGU’s National Tax Share

Published September 11, 2019, 12:05 AM

by Charissa Luci-Atienza & Bernie Cahiles-Magkilat



Atty. Joey D. Lina
Atty. Joey D. Lina

Last week’s decision of the Duterte administration to defer until 2022 the implementation of the Supreme Court ruling entitling local government units to more money from collected taxes is quite lamentable for LGUs expecting to be able to pursue more development programs with more funds.

The SC had ordered, in a July, 2018, decision which has become final and executor, the inclusion of “all collections of national taxes in the computation of the base of the just share of the Local Government Units according to the ratio provided in the now-modified Section 284 of Republic Act No. 7160 (Local Government Code), except those accruing to special purpose funds and special allotments for the utilization and development of the national wealth.”

In effect, the High Court ruling entitles the country’s provinces, cities, municipalities, and barangays to more funds – representing National Tax Allotment (NTA) shortfalls due LGUs and covering fiscal years 2019 through 2022 – to the tune of a total of P1.131 trillion. Instead of “IRA” or Internal Revenue Allotment, “NTA” is now the new term used, considering that the SC declared unconstitutional the phrase “internal revenue” in the Local Government Code (LGC) and ordered the phrase deleted from its Section 284.

LGUs around the country had hoped to reap the benefits of the SC decision as soon as possible but Malacañang announced last Thursday that the increased funding for LGUs can not be realized during President Duterte’s term because an “unmanageable fiscal deficit” would occur.

“Due to the various commitments of the President to the people, such as the implementation of programs designed to combat criminality and corruption, as well as activities of the national government to promote human development and poverty reduction, to name a few, it was agreed that the adjustment of the IRA may not be feasibly effected during this administration,” Presidential spokesman Salvador Panelo said. “Otherwise, there will be an unmanageable fiscal deficit, while securing loans will be more expensive to the nation as the citizenry will be paying for higher rates.”

League of Provinces of the Philippines (LPP) National President and Marinduque Gov. Presbitero Velasco Jr. had earlier sought President Duterte’s intercession for the NTA “to be prospectively released automatically to all LGUs beginning July 1, 2019, and thereafter.”

In a July 15 letter to President Duterte, Velasco said: “While we understand the financial implications as a result [of the SC ruling], LGUs need the additional resources now under your administration, more so with the implementation of the Universal Health Care as well as with your other priority programs.”

Being a former LPP national president myself when I was governor of the province of Laguna, and also national president of the Union of Local Authorities of the Philippines, I certainly empathize with LGUs which are at the forefront in the delivery of essential services to the people.

The success of the entire government machinery in solving the chronic problems of poverty, underdevelopment, and corruption is, to a large extent, dependent indeed on the strength of its parts, consisting of LGUs in provinces, cities, towns, and barangays.

Unlike national officials, our governors, city and town mayors, and barangay officials, together with their respective council members, are in the best position to know, understand, and appreciate the real situation of their constituents. They can then plan and implement needed short and long-term solutions. They form the frontlines in the delivery of health, public order and safety, agriculture, tourism, public works, environmental protection, and other services that promote the general welfare of the people within their territorial jurisdiction.

Today’s various challenges – the most daunting of which is grinding poverty – may be overwhelming when viewed from a national perspective, but solutions can emerge by “localizing” problems and subjecting then to sharper focus.

Even national efforts to combat widespread criminality can attain more success with the active involvement of local officials – especially city and municipal mayors – who are in charge of crime prevention and maintenance of peace and order within their respective areas, having “operational supervision and control” over police units within their jurisdiction as deputized representatives of the National Police Commission which exercises administrative control over the Philippine National Police.

The provincial governors, city and municipal mayors, as chairmen of the provincial, city and municipal peace and order councils, can also do a lot to help in national efforts to fight criminality because they oversee the implementation of their respective LGU public safety plans, which are prepared taking into consideration the integrated community safety plans.

Thus, it is essential that LGUs are treated as truly indispensable partners in the pursuit of “activities of the national government to promote human development and poverty reduction, to name a few” to raise the chances of success. In this regard, it would be best for administration officials to sit down with officers of the various local government leagues and thresh out how to effectively go about implementing the SC decision.

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