The shares of local government units (LGUs) in the collection of national taxes shall substantially increase – many by as much as 30-percent – under the federal system being proposed by a majority of senators, according to Senate Minority Leader Aquilino Q. Pimentel, Jr. (PDP-Laban) today said.

As provided for in Joint Resolution 10 calling for the adoption of a federal system, all revenues and taxes collected by the LGUs or by the national government shall be divided in the following manner: 20-percent shall accrue to the federal government and 80-percent to the federal states.

Of the share accruing to the states, 30-percent shall go to the state concerned and 70-percent shall be apportioned among the provinces, cities, municipalities and barangays, according to the formula prescribed under the Local Government Code of 1991.

Senator Pimentel, principal author of Joint Resolution 10, explained that the shares of LGUs defined under the Code, will get much bigger under the proposal because the funds to be apportioned shall include all revenues and taxes imposed or collected by the federal government.

“That means that monies like customs duties and the collections of seaports will now be included in the revenues to be divided among the federal government, the states and the provinces, cities, municipalities and barangays,” he said.

Under the present system, Mr. Pimentel pointed out that “only taxes as taxes strictly construed are subjected to division between the central government and LGUs.”

Based on the proposed sharing formula, the province of Abra should get P543-million from government revenues this year. This is P155.1-million more than its present Internal Revenue Allotment of P387.8-million.

The province of Capiz will be entitled to P710.6-million if the federal system is established – P203-million more than its current year IRA of P507.6-million.

Compostela Valley’ share will be raised to P766.2-million from the present P547.3 million or a difference of P218.9-million.

Legazpi City will obtain P383.2-million, up by P109.4-million from the present P273.7-million.

The share of Lapu Lapu City will go up from the current IRA of P294.5-million to P412.4-million under the new sharing plan, or a difference of P117.8-million.

Cotabato City will have a share of P401.5-million, a P114.7-million hike from the present IRA of P286.8-million.

In the municipal level, the share of Calanasan, Apayao, will jump to P134.1-million, an increase of P38.3-million from the P95.8-million it is now getting.

Gandara, Samar, will get P94.1-million which is P26.8-million bigger than its present IRA of P67.2-million.

The share of Languyan, Tawi Tawi, will jump by P30.9-million from P77.3-million to P108.3-million.

Senator Pimentel said the new revenue-sharing system will be characterized by transparency and accountability by requiring the federal government to publicize the remittances of the revenue and tax shares in its website, as well as in the national newspapers, radio and television.

He said both the federal government and the federal states shall also be required to submit to the Federal Commission on Audit the pertinent documents showing the remittances and receipts of the amounts.

Under the proposal, the federal state shall directly remit the shares of the provinces, cities, municipalities and barangays within 15 days from their receipt of the shares from the federal government without unnecessary delay.

“The overall effect of requiring direct remittance is to free the receiving units of government from being held hostage by the remitting authorities. By that, I mean the states and the local governments would no longer be subjected to all kinds of humiliating pressures from those through whose hands their shares of the government revenues used to pass,” Senator Pimentel said. # # #

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