A CEBU City Government official welcomed the Supreme Court (SC) ruling that would give local government units a share of all taxes collected by the National Government, and not only internal revenue taxes.
Acting City Treasurer Veronica Morelos said the SC ruling will help the City get a bigger share of the National Government's income.
"That would mean additional income to the city," she said, adding that with a bigger share, the City will have funds for more projects needed in the city.
Deciding on a six-year-old petition filed by then representative and now Batangas Gov. Hermilando Mandanas, the High Court ruled that the Internal Revenue Allotment (IRA) for cities, municipalities and provinces would now include tax collections of other agencies apart from those collected by the Bureau of Internal Revenue (BIR).
"The Court, voting 10-3, interpreted the basis for the 'just share' of local government units under Section 6, Article X of the 1987 Constitution as being based on all national taxes and not only national internal revenue taxes, as provided in Section 284 of the Local Government Code," the SC said.
Section 284 of the Local Government Code states that provincial, city and municipal governments must receive 40 percent of the total national internal revenue taxes collected by the central government.
Internal revenue taxes refer to taxes imposed by the BIR such as income taxes, estate and donor's taxes, value-added tax, excise taxes and documentary stamp taxes.
In the petition, Mandanas also argued that Section 284 on Allotment of Internal Revenue Taxes of Republic Act 7160 (Local Government Code) clearly defines the LGUs "just share."
The said section states that "local government units shall have a share in the national internal revenue taxes based on the collection of the third fiscal year preceding the current fiscal year, as follows: a On the first year of the effectivity of this Code, thirty percent (30%) b. On the second year, thirty-five percent (35%); c. On the third year and thereafter, forty percent (40%)."
Mandanas told the Court that it is clear with the existing laws and the Constitution that the IRA should include the entire internal revenue taxes collected by the National Government.
Following the ruling of the SC, Mandanas asked MalacaƱang to recast the 2019 budget it endorsed to Congress to implement the recent ruling.
It is not clear yet, though, if the ruling could be implemented this year as the SC has not immediately released a copy of the ruling pending signatures of all justices. (RVC, SunStar Philippines)