LAGAWE, Ifugao – Baguio City Mayor Mauricio G. Domogan urged all local governments in the Cordillera to pass separate resolutions requesting the Department of Budget and Management (DBM) to recast the computation of their internal revenue allotment to reflect the accumulated unremitted shares of the local governments even in an instalment basis.
Domogan, who chairs the Regional Development Council (RDC) and the Regional Peace and Order Council (RPOC), announced that the Supreme Court (SC) recently ruled in favour of the local governments regarding the share of the local governments from the national taxes that should have included the taxes collected by the Bureau of Customs (BOC) instead of the taxes collected by the Bureau of Internal Revenue (BIR) alone.
Based on initial computations from the League of Cities of the Philippines, he disclosed that the national government owes the local governments over P1.5 trillion as share from the national taxes collected by revenue collecting agencies which were not credited to their IRA through the years.
Earlier, the SC upheld the constitutionality of Section 9 in relation to Section 15, Article 9 of Republic Act (RA) 9054 or the Expanded Autonomous Region of Muslim Mindanao Act, Section 8 of RA 7227 or the Bases Conversion and Development Act of 1992; Section 287 of the National Internal Revenue Code, Section 290 of RA 7160 or the Local Government Code of the Philippines, Section 288 and Section 289 of the National Internal Revenue Code and Section 24(3) of Presidential Decree (PD) No. 1445 or the Government Auditing Code of the Philippines in relation to Section 284 of the National Internal Revenue Code.
Further, the SC declared the term internal revenue found in Section 284 and Section 285 of RA 7160 as constitutionally infirm for being in contravention of Section 6, Article 10 of the 1987 Constitution and considers the term as internal revenue as not written.
The High Court also declared Section 6 of RA 6631, Section 8 of RA 6632, and Section 283 of the National Revenue Code as constitutionally infirm for being violative of Section 6, Article 10 of the 1987 Constitution and considers the shares of affected local government units in the national taxes as not written.
The SC ordered that henceforth, the BIR shall certify all collections by the Bureau of Customs, including but not limited to tariff, customs duties, Value Added Tax, DST and excise taxes as national taxes in accordance with and pursuant to Article 378 of the Implementing Rules and Regulations of the Local Government Code.
Moreover, the SC directed the BIR and the BOC to continuously report and certify all their collections of national taxes, not otherwise included herein, in all fiscal years for purposes of determining the basis for the computation of the allotments of the local government units as determined by the Local Government code.
The SC also stated that the DBM and the National Treasurer shall automatically release the shares of local government units in accordance with its latest decision dated July 3, 2018 and pursuant to the schedule provided by the Local Government.
Under the Local Government Code, local government units are entitled to a share of 40 percent of the national taxes collected by the national government while the 60 percent will remain with the national coffers.
By Dexter A. See
