The Department of Finance said concerns on the computation of the National Tax Allotment shares for local government units have been resolved.
In a statement, the DOF said Finance Sec. Ralph Recto addressed these concerns during Wednesday’s dialogue with city mayors.
During the meeting, Recto provided a detailed line-by-line briefing to the city mayors on the NTA computations.
Present during the briefing were Baguio City Mayor Benjamin Magalong, Quezon City Mayor Joy Belmonte, and Dumaguete City Mayor Felipe Antonio Remollo.
He also ensured full alignment with the 2019 Mandanas-Garcia ruling of the Supreme Court and relevant laws.
A comparison of the computations between the LGUs and the DOF was also discussed, revealing that the calculations and deductions under various laws were more or less aligned.
“We did not change or amend anything. This is based on the Supreme Court ruling and a Development Budget Coordination Committee resolution, which was made in consultation with the LGUs. We are very transparent,” Recto said.
The DOF said city mayors thanked the Department for the dialogue and its openness to listening and addressing concerns.
Baguio Mayor Magalong apologized to Secretary Recto for his earlier remarks suggesting that LGUs were being shortchanged in their NTAs.
Recto assured that the DOF is always open to having continued dialogues with LGUs to help them strengthen their fiscal capacities and optimize resource utilization to deliver more and better services to Filipinos.
The high court’s Mandanas-Garcia ruling, which took effect in 2022, increased the NTA shares of LGUs to 40 percent of all national taxes beyond those collected by the Bureau of Internal Revenue.
The increase aims to enhance the fiscal autonomy of LGUs by granting them a more substantial share of the national tax base.
In its decision, the SC ordered the Secretary of the DOF, the Secretary of the Department of Budget & Management, the Commissioners of the BIR and the Bureau of Customs, and the National Treasury, to include all national tax collections in the computation of the NTA base, “except those accruing to special purpose funds and special allotments for the utilization and development of the national wealth.”
Recto earlier said that in determining the deductions, the DOF said it is guided by the SC decision including Section 29 (3), Article VI, and Section 7, Article X of the 1987 Constitution.
In a separate briefing with reporters on Thursday, Recto also explained the items that are exempted from the computation of the LGUs share.
“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 [decision],” he said.
“I think what is important is no one is shortchanging the local government. And as promised, we are very transparent. We show them all the calculations.”
Recto said LGUs will have additional revenues next year.
“We’ve made calculations that there are laws that will expire this year so that by 2026, there will be additional revenue for the local government units, particularly the TRAIN (Train Reform for Acceleration and Inclusion),” he said.
“So they will have an additional share because there’s a five-year timeframe on the earmarking right. So today they’re getting roughly 32 percent, we calculated yesterday to go up to about 35 [percent] by 2026 more or less.”
Recto said the national government will make sure that LGUs will have a fair share in the NTA.
“I reminded them that the President was a former governor [of Ilocos Norte]. We’re interested to make sure that the local governments get their fair share,” he said. “The President… understands local government.”
“My wife [Rosa Vilma Santos] was former [Lipa City] mayor, and [Batangas] governor, so we have the interest of LGUs in mind.” (PNA)