Secretary Ralph Recto
MANILA, Philippines – Secretary Ralph Recto assured that the Department of Finance (DOF) is complying with the Supreme Court (SC) decision and relevant laws in determining the National Tax Allotment (NTA) shares for local government units (LGUs).
Recto issued the statement Sunday after the group Mayors for Good Governance earlier asked the DOF for an accounting of the 40 percent LGU share from national taxes.
“We assure our LGUs that we are strictly adhering to transparency and accountability, especially with the principles set by the Supreme Court, in implementing the Mandanas-Garcia ruling,” Recto said in a statement on Sunday.
“Nothing is shortchanged. We are very much welcome and open to having continued dialogues with our LGUs to help them strengthen their fiscal capacities and optimize resource utilization to deliver more and better services to Filipinos,” he added.
The 2019 Mandanas-Garcia ruling, which took effect in 2022, increased the NTA shares of LGUs to 40 percent of all national taxes beyond those collected by the Bureau of Internal Revenue (BIR).
The adjustment aims to enhance the fiscal autonomy of LGUs by granting them a more substantial share of the national tax base.
The SC ordered the secretaries of the DOF and Budget and Management, commissioners of the BIR and the Bureau of Customs, and the National Treasury to include all national tax collections in the computation of the NTA base, “except those accruing to special purpose funds and special allotments for the utilization and development of the national wealth.”
In determining the deductions, the DOF said it is guided by the SC decision, including Section 29 (3), Article VI, and Section 7, Article X of the 1987 Constitution.
The DOF said Recto is set to meet the League of Cities this coming week to discuss the computation of the NTA.