Local government units (LGUs) will be receiving a 35-percent share from the National Tax Allotment (NTA) by 2026, President Marcos’ chief economic manager said.

During an informal press chat on Wednesday, Jan. 16,  Finance Secretary Ralph G. Recto told reporters that come 2026, LGUs share from the NTA is 35 percent, falling short of the 40 percent share ordered by the Supreme Court (SC).

According to Recto, the national government currently shares roughly 32 percent of its earnings with LGUs, which can reach around 35 percent next year. 

He noted that LGUs will receive an additional share as the earmarking provision follows a five-year timeframe. 

He also said that by 2026, “there will be additional revenue for the local government units,” as the Tax Reform for Acceleration and Inclusion (TRAIN) Law will expire this year.

The TRAIN Law, or RA 10963, aimed to simplify the country’s tax system, making it fairer while boosting government revenue for key projects and services. 

“I think what is important is no one is shortchanging the local government,” Recto assured, adding that the national government is “very transparent” in that it shows all the concerned agencies all the calculations.

Recto earlier assured the LGUs that DOF is “strictly adhering to transparency and accountability, especially with the principles set by the Supreme Court, in implementing the Mandanas-Garcia ruling.”

On Jan. 15, Recto discussed a comparison of the computations between the agency and the LGUs, “revealing that the calculations and deductions under various laws were more or less aligned.”

When asked which items are excluded from the share computation, Recto said “everything that is earmarked and all special purpose funds and special allotments like BARMM [Bangsamoro Autonomous Region in Muslim Mindanao]. Those are all deducted consistent with the Supreme Court.”

In his meeting with the city mayors on Jan. 15, Recto assured them that the national government is “interested to make sure that the local governments get their fair share.”

To recall, the 2019 Mandanas-Garcia ruling, implemented in 2022, hiked the share LGUs from national taxes to 40 percent, including other collections aside from those of the Bureau of Internal Revenue (BIR). This move aims to boost the fiscal autonomy and resources of LGUs.

The SC directed key government agencies to include all national tax collections in the computation of LGUs’ NTA, excluding special purpose funds and allocations for national wealth development.