2. one basic requisite for increasing the financial capacity and
strengthening the fiscal position of local governments.
To generate financial resources and to utilize available and
potentials sources of revenue.
however, it would not be of any use to generate financial
resources of the local units are not endowed with adequate
tax bases; if the objects of taxation yield very meager
revenue and/ or available and potential sources revenue are
very limited.
3. Existence and accessibility of objects to
tax and source of revenue to tap- business
establishments.
Local service and activities
Taxable real properties and taxable
operation
4. • Generation of capital
for economic growth
• Efficient allocation of
resources for balanced
economic growth
• Preservation of
economic
independence and self
sufficiency of the
country
5. local taxation
rentals and charges for the use of public property and
resources within local jurisdictions
earnings from local public enterprises and utilities
permits and licenses issued
establishments and operations within local boundaries
charges and fees for local government services and activities
6. Tax on transfer of real property ownership
Tax on business on printing and publication
Franchise tax
Professional tax
Amusement tax
Real property tax
Tax on sand, gravel and other quarry resources
30%
Annual fix tax for every delivery truck or van
of manufacturers of producers, wholesalers of ,
dealers or retailers of certain products
Public utility charges
7. Tax from business aside from printing and
publication
Tax on retirement of business
Tax on the following business:
a. On manufactures, assemblers, repackers,
processors, borrowers, distillers, rectifiers and
compounders of liquors, distilled spirits and wines or
manufacturers of any article of comers of what so
ever kind or nature
b. On exporters, and on manufacturers, millers ,
producers, wholesalers, distributers, dealers or
rectifiers of essential commodities like rice, corn,
wheat, flour, meat, dairy products, cooking oil and etc.
c. On retailers
8. d. On contractors and other independent
contractors
e. On banks and other financial institutions
f. On peddlers engaged in the sale of any
merchandise or article of commerce
Community tax
Reasonable fees and charges on business on
occupation and on the practice of any profession or
calling commensurate with the cost of regulation,
inspection and licensing
Fishery rentals, fees and charges
Fees of selling and licensing of weights and
measures
Public utility charges
Real property tax 40% (Metro Manila 35%)
Gravel and other quarry resources 30%
9. Taxes on stores or retailers with fixed business
establishment
Service fees or charges for services rendered in
connection with barangay-owned properties and
facilities
Fees and charges on billboards, sign boards,
neon signs and outdoor advertisements
Barangay clearance
Real property tax 15% (the other 15 % of the
real property tax is distributed among the other
barangays within the municipality or city)
Gravel and other quarry resources 40%
10. Note: The Local taxing powers of the Local Units
under the New Local Government Code are almost
the same as those vested under the local tax code.
Residence Tax
-formerly a central government levy that has
been added to the taxes being imposed by
local governments
Instead of devolving more taxing powers to local
governments, the code modifies certain aspects
of the existing system of local taxation in order
to enable the local unit to generate more
revenues.
11. They are authorized to increase the rates in
certain types of levies and are entitled to bigger shares
from the collections of certain taxes.
There are also external sources of local revenue,
which are created and administered by the national
government or by agency/ institutions outside the
administrative jurisdiction and responsibility of the
local governments. These revenues are more or less pre-determined
and amounts of which are beyond the
capacity and efforts of local governments to increase.
12. Internal Revenue Allotment (IRA)
-constitute the greatest external source of
revenue of local units from the total internal
revenue or national tax collection
Under PD 144 as amended, local governments were
allotted annually a total share of 20 % from the
total internal revenue collection (total collection of
national taxes)
20% from the total internal revenue
50% 50%
30% - Provinces
45% - Municipalities
25% - Cities
100% -Barangays
13. The sharing was computed on the basis
of three weighted factors:
-population 70%
-land area 20 %
-equal sharing 10%
Under the New Code, the IRA for local units
have been increased by 100% from 20-40% of the
total internal revenue collection. The 40 % allotments
sharing is to be implemented on a staggered basis:
30% in 1992, 35% in 1993, and 40 % in 1994 and
years thereafter.
14. In accordance with the modified sharing scheme
of 40%:
40% from the total internal revenue
100%
23% - Provinces
34% - Municipalities
23% - Cities
20% - Barangays
The sharing was computed on the basis
of three weighted factors:
-population 50%
-land area 25 %
-equal sharing 25%
15. In addition to the IRA, the central
government, upon the discretion of the President,
gives financial assistance in the form of grants and
aids for special local development projects and
services
An efficient and productive revenue collection
system is necessary.
Considering that local government in general
rely heavily on shares from internal revenue
collections for their income, there should be some
change in the criteria for allocating an distributing
the internal revenue allotments.
16. What may proposed would be:
*The tradition of revenue collection
performance as another criterion to the present
three criteria (population, land area, and equal
sharing) to determine the internal revenue
allotments of provinces, cities, municipalities and
barangays.
*An additional percentage share on the basis
of revenue collection efficiency maybe given, which
could serve as incentive for the local authorities to
intensify their revenue collection effort.
17. The corollary recommendation would be
for the national government to impose
justifiable sanction- like withholding their
internal revenue allotments – upon local
governments, which demonstrate consistently
substandard revenue collection performance.
THE END
