REVENUE reported by local government units (LGUs) rose by 19.4% year on year in the first quarter to P319.42 billion, after they started taking an additional share of the national taxes in the wake of the Supreme Court’s (SC)Mandanas ruling, the Bureau of Local Government Finance (BLGF) said.
Income from external sources, including their newly enlarged share of national taxes, amounted to P184.45 billion, outweighing the income they generated from local taxes and fees of P134.97 billion, according to preliminary data compiled by the BLGF.
The Mandanas ruling, so named after the petitioner, Batangas Governor Hermilando I. Mandanas, granted LGUs a larger share of the national taxes after the Supreme Court liberally interpreted the Local Government Code in the LGUs’ favor.
The code had originally made LGUs eligible to receive an “internal revenue allotment (IRA),” which National Governments had interpreted to mean a 40% share of the collections of the Bureau of Internal Revenue. The court ruled that LGUs are entitled to a 40% share of all national taxes, including those collected by other agencies like the Bureau of Customs.
The IRA has since been renamed the national tax allotment (NTA).
Local taxes and fees, also known as locally sourced revenue, rose by 8.6% in the first quarter.
BLGF Executive Director Niño Raymond Alvina said in a statement that most LGUs remained reliant on the IRA/NTA, which was equivalent to 64% of their operating income.
Cities received an NTA of P102.27 billion, while municipalities and provinces took in P97.82 billion and P63.12 billion, respectively. — Diego Gabriel C. Robles
