EMPOWERING LGUS THROUGH

FISCAL AUTONOMY

REP. MEL SENEN S. SARMIENTO

Secretary General, Liberal Party of the Philippines
Head of House Contingent to the Commission on Appointments
Chairman, Joint Congressional Oversight Committee on the Automated Election System
 LOCAL GOVERNMENT CODE
SECTION 285

IRA ALLOCATION TO LGUs

PROVINCES 23%

CITIES 23%

MUNICIPALITIES 34%

BARANGAYS 20%
 FORMULA
POPULATION 50%

LAND AREA 25%

EQUAL SHARING 25%

 LOCAL GOVERNMENT CODE
SECTION 284. ALLOTMENT OF INTERNAL
REVENUE TAXES.

THE THIRD FISCAL YEAR PRECEEDING THE

CURRENT FISCAL YEAR

40% OF NATIONAL INTERNAL REVENUE TAXES

G.R. No. 152774.
IRA REDUCTION
Sec. 286 – Automatic Release of
Shares

G.R. No. 132988.

GSIS INTERCEPTION
 SITUS OF TAXATION PROBLEM
SECTION 150. SITUS OF THE TAX.

In cases where there is no such branch or sales

outlet in the city or municipality where the sale
or transaction is made, the sale shall be duly
recorded in the principal office and the taxes
due shall accrue and shall be paid to such city or
municipality.
THERE ARE UNFUNDED MANDATES
IN CONGRESS

X% OF BUDGET
 HOUSE BILL 84
VALUATON REFORM ACT BILL

AN ACT INSTITUTIONALIZING REFORMS IN REAL

PROPERTY VALUATION AND ASSESSMENT IN THE
PHILIPPINES, REORGANIZING THE BUREAU OF
LOCAL GOVERNMENT FINANCE, AND
APPROPRIATING FUNDS THEREFOR
 HOUSE BILL 4719
One of the salient features:

REQUIRING THE BIR TO SHARE TAX

INFORMATION WITH LGUs

SEC – BIR – LGU

 INTERNAL REVENUE CODE
SEC.270. Unlawful Divulgence
of Trade Secrets.
BIR employees and officers are
prohibited to divulge any
information they have
acquired in the official
discharge of their duties unless
provided bylaw
LOCAL GOVERNMENT CODE
Section 171. Examination of
Books of Accounts and
Pertinent Records of
Businessmen by Local
Treasurer.
3rd Paragraph:
For this purpose, the records
of the revenue district office of
the Bureau of Internal
Revenue shall be made
available to the local treasurer,
his deputy or duly authorized
representative.
 HOUSE BILL 4720
The share of the local government
units is increased from forty percent
(40%) to forty five percent (45%) of
the gross collection derived by the
national government
 LOCAL GOVERNMENT CODE
Section 316. Local Finance Committee.

Cash Management Unit

In evaluating the performance of LGUs in raising
revenues, the basis of the DOF’s TaxWatch
campaign must focus on the “potential maximum
collection” of the LGU instead of being compared
with other cities because this would be like
comparing apples versus oranges.

For example, if the IRA of an LGU is 70 M and its

locally generated fund is 29M and based on the
study of DOF the potential max collection of that
LGU is 30M, then the LGU has performed well
regardless if the locally generated income is less
than its IRA
GOOD ECONOMY + HIGH BIR COLLECTION
= HIGHER IRA
= MORE PROJECTS AND PROGRAMS FOR
LGUS
FISCAL AUTONOMY COMES WITH
FISCAL RESPONSIBILITY

UPLIFT SOCIOECONOMC CONDITIONS OF

PEOPLE