Gov. Mandanas: LGUs lost P1.8T tax-take shares

By : Uriel Quilinguing Mindanao Today/10:42:28am 09/27/2021


Fiscal management and revenue-generating agencies of the national government have deprived local government units (LGUs) of about P1.5 to P1.8 trillion of supposed shares from tax collections since the Local Government Code (LGC) took effect in 1992, Batangas Gov. Hermilando Mandanas said.

CAGAYAN DE ORO CITY - Fiscal management and revenue-generating agencies of the national government have deprived local government units (LGUs) of about P1.5 to P1.8 trillion of supposed shares from tax collections since the Local Government Code (LGC) took effect in 1992, a local chief executive said.

Batangas Gov. Hermilando Mandanas, the main petitioner behind the landmark 2018 Supreme Court (SC) decision which broadened the base in the computation of LGU’s share from national taxes starting next year, disclosed this computation Thursday, Sept. 23, in a virtual forum.

But Mandanas, who was then congressman when he filed the petition in 2013 before the SC, admitted recovering the foregone revenues cannot be done because the SC has dismissed it already in a 21-page en-banc ruling, deemed final and executory last April 10, 2019.

The high court’s verdict, which has a prospective application, has deleted the phrase “internal revenue” from Section 284, Republic Act 7160 of the LGC which – for almost 30 years – has been the base in computing the local government’s Internal Revenue Allotment (IRA).

Thus, the “just share” of the LGUs shall then be called National Tax Allocation (NTA), not IRA.

With this, the shares of the LGUs in the 2022 budget is expected to increase by an average of 30% or as low as 27% to as high as 55%, Mandanas said, citing Batangas province’s case which is expecting a P1.2 billion increase over its current IRA.

“The President is in agreement with the decision of the Supreme Court,” Mandanas recalled when he had a “one-on-one” meeting with the chief executive – though in the presence of Local Government Secretary Eduardo Año and Presidential Spokesperson Herminio “Harry” Roque –after the high court handed down its verdict on the disputed basis for tax-sharing computation.

He said he fully understands why President Rodrigo Duterte welcomed the SC ruling since the latter was Davao City Mayor for 22 years.

Executive Order No. 138, which Duterte issued last June 1 this year, directed all agencies concerned that the adjusted NTAs of LGUs shall start in fiscal year 2022 which begins on July 1 and ends on June 30.

Further, the SC has ordered the secretaries of finance, budget management, the commissioners of customs and internal revenue, as well as the national treasurer to include all collections of national taxes in the computation of the base of the “just share” of the LGUs, according to the ratio provided in the modified Section 284 of RA 7160.

Aside from internal revenues, collections from tariff and custom duties, value-added tax, national wealth tax, excise taxes, among others, become the base in the computation of the NTAs of LGUs.

Also, the High Court also directed the Department of Budget and Management for the “automatic release without need for other action” of the just shares of the LGUs on a quarterly basis but not beyond five days from the end of each quarter.

With the implementation of the Mandanas-Garcia ruling next fiscal year, the Department of Interior and Local Government foresee that additional P260 billion will be infused into the coffers of local governments consisting of 81 provinces, 145 cities, 1,489 municipalities, and 42,029 barangays.

But Mandanas, during the forum, clarified that increasing the local government’s IRA was not really their primary intention when he and eight others petitioned the SC.

He said they just wanted that basic services, such as health, education, livelihood and assistance to farmers and tourism industry be delivered “efficiently, expeditiously, and economically” at the community level.

Among those who joined Mandanas in pushing for “inclusive and sustainable development at the grassroots level” before the country’s highest court were four village leaders and three town officials.

He said the SC decision should properly be called Mandanas-Garcia ruling since there were two petitions integrated into one by the Supreme Court; the other was filed by the late Bataan 2nd District Representative Enrique Garcia Jr.

The Mandanas, et al. petition was endorsed by the provincial board of Batangas while that of Garcia was on the latter’s personal capacity as member of Congress.

The respondents of then were Executive Secretary Paquito Ochoa, Finance Secretary Cesar Purisima, Budget and Management Secretary Florencio Abad, Revenue Commissioner Kim Jacinto-Henares, National Treasurer Roberto Tan, and Customs Commissioner Rozzano Rufino Biazon.

Then SC Chief Justice Lucas Bersamin and nine other justices penned the “landmark” decision while three others had dissenting opinions.

Organized by the Association of Schools in Public Administration in the Philippines (ASPAC), the virtual forum was hosted by the Lyceum of the Philippines University – Batangas and support of the University of the Philippines’ Open University Los Baños.

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