DBM urged to withdraw SC appeal on LGU tax share

BAGUIO CITY – Mayor Mauricio G. Domogan urged the Cordillera office of the Department of Budget and Management (DBM) to bring to the attention of its central office the overwhelming clamor of local governments in the region to withdraw its appeal before the Supreme Court (SC) seeking the earlier reversal of the high tribunal that redefined the definition of taxes where the 40 percent share of LGUs will be computed as the funds accrue to the benefit of the public.

The local chief executive agreed to the contention of Ifugao Gov. Pedro Mayam-o that the national government should not make it hard for the local government by having a bigger share in terms of their annual internal revenue allotment (IRA) because the funds will be used for the implementation of high impact development projects and improve the delivery of basic services to the people, especially in the remote communities of the country.

Earlier, the SC ruled that the taxes collected by the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) are national taxes in nature, thus, the collection of the BOC should be included in the computation of the 40 percent share of local governments from the taxes collected by the revenue-collecting agencies.

However, the DBM filed a motion for reconsideration assailing the SC’s ruling combining the tax collections of the BIR and the BOC in the computation of the mandatory 40 percent share of local governments from the taxes being collected by the national government.

“The DBM should not deprive the local governments a bigger share of the taxes accruing to the national coffers because the funds will be downloaded to the localities for the greater interest of the people, translating into more projects in their respective areas of jurisdiction and significant improvement in the delivery of basic services in the countryside,” Domogan stressed.

Under the provisions of Republic Act (RA) 7160 or the Local Government Code of the Philippines, all local governments are entitled to a 40 percent share of the taxes collected by the national government and for over two decades now, this share came only from the taxes collected by the BIR, depriving local governments of bigger IRAs.

Based on studies conducted by the members of the Constitutional Committee (ConCom) constituted by President Rodrigo R. Duterte to review the provisions of the 1987 Constitution for possible amendments, local governments had been short-changed since the implementation of the Local Government Code because instead of receiving 40 percent share from the taxes collected by the national government, the actual remittance of the national government to the local governments as IRA was computed to be around 17 to 18 percent which is way below the required 40 percent share of the local governments.

Domogan, who chairs the Cordillera Regional Development Council (RDC-CAR) and the Regional Peace and Order Council (RPO-CAR), asserted that the increased IRAs of local governments will translate to more projects and better services for the people, especially in the rural areas of the country.

By Dexter A. See

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