LGUs to get P959.04 billion tax share next year

MANILA, Philippines — Local government units (LGUs) will get their share of national taxes amounting to P959.04 billion next year when the so-called Mandanas ruling takes effect.

During the hearing of the House committee on Mindanao affairs on Tuesday, Department of Budget and Management (DBM) director John Aries Macaspac said the national tax allotment (NTA) or what was formerly called the internal revenue allotment (IRA) of LGUs would increase by P310 billion from P648.92 billion this year.

Macaspac said the NTA allocation was set at P773.87 billion or about P185 billion lower if the Supreme Court (SC) decision would not be implemented.

The Mandanas ruling, which the SC issued in 2018, was based on the petition of Batangas Gov. Hermilando Mandanas and former Bataan governor Enrique Garcia Jr.

The SC affirmed that LGUs are entitled to a “just share” of all national taxes and not only those being collected by the Bureau of Internal Revenue (BIR).

The ruling held that the IRA should come from 40 percent of all national taxes, including the BIR’s tax take as well as import duties and those collected by the Bureau of Customs.

Up to this year, the IRA of LGUs comes from 40 percent of the BIR’s collections.

At the same hearing, director Anna Bonagua of the Department of the Interior and Local Government said the DBM and DILG issued a joint memorandum mandating all LGUs, except the Bangsamoro Autonomous Region in Muslim Mindanao, to prepare their Devolution Transition Plan.

Bonagua said the DTP would serve as the roadmap of LGUs to ensure a strategic perspective as well as systematic and coherent actions toward full assumption of devolved functions.