The Department of Budget and Management (DBM) said that given the increase the increase in national tax allotment (NTA) shares, local government units (LGUs) will see a stronger exercise of autonomy once the full devolution is implemented.
In a statement on Wednesday, Feb. 15, Budget Secretary Amenah F. Pangandaman reiterated that LGUs will enjoy autonomy in the identification and implementation of programs, projects, and activities to be funded from their respective financial resources like the NTA.
“The advantage is proper identification of projects because they know what they really need in their respective area, so I think this will be beneficial for them,” said Pangandaman during a recent radio interview.
The Supreme Court, in its Mandanas-Garcia ruling, corrected the basis of the just share of LGUs in the national taxes, which effectively resulted in an expansion of the resources transferred to the LGUs.
The NTA shares of LGUs are based on the tax collections of the government.
“The computed total IRA is based on the income of the Customs and BIR . Basically, the tax collections of the national government... will be the basis of their shares,” explained Pangandaman.
Consistent with Section 284 of Republic Act No. 7160, or the Local Government Code of 1991, the amount of LGU shares in the national taxes for a given fiscal year is based on the collection of the third fiscal year preceding the current fiscal year.
Consequently, Section 2.2.1 of Local Budget Memorandum (LBM) No. 85 reiterates that the total FY 2023 NTA shares of LGUs shall be based on the actual collections of national taxes in FY 2020, as certified by the Bureau of Internal Revenue (BIR), Bureau of Customs, and Bureau of the Treasury.
The budget chief underscored that the DBM will provide technical assistance to, and will perform oversight functions over, the LGUs to ensure proper budgeting and expenditure management practices.
Earlier, Pangandaman said the national government will help capacitate LGUs in the process of devolution of government services until full implementation.
In particular, Pangandama said the DBM will conduct capacity building, training, and seminar for LGUs to ensure they will be self-reliant once the full devolution is implemented.
Devolution is the transfer or delegation of power to a lower level, from the national government to LGUs.