Press Release
April 19, 2015

LGUs rightful shares in national taxes is justified -- Pimentel

Senator Aquilino "Koko" Pimentel III today said the right of local government units (LGUs) to receive their rightful share of the "national taxes" is justified owing to the additional responsibilities that they bear under the Constitution and the laws.

Pimentel told the just-concluded General Assembly of town mayors at the Manila Hotel that their annual allocations from the national taxes "does not flow from and should not rely on the generosity of the national government."

"Hindi dapat isipin na dole-outs ang anumang salapi na inilalaan sa local governments," said Pimentel of his "Bigger Pie, Bigger Slice" bill that seeks to expand the tax base and increase LGUs' shares from 40 to 50 percent of the "national taxes."

He said the proposed formula includes the national internal revenue taxes collected by the Bureau of Internal Revenue (BIR) plus tariffs, duties, and charges, and national internal revenue taxes, if any, collected by the Bureau of Customs (BOC).

"I have also made it unmistakably clear that the national internal revenue tax shall include the value-added tax," said Pimentel.

That's the "Bigger Pie" portion of the bill, essentially expanding the size of the pie to be divided between the national and local governments, he said.

The "Bigger Slice" component refers to the equalization of the division of the pie between the national and local governments. "Hating kapatid," he added.

"Bakit mahalaga ito?... Kung 50-50% ang sharing sa kita ng pamahalaang nasyonal, magkakaroon ng tunay na devolution, tunay na fiscal autonomy, at tunay na financial planning and management," said Pimentel,

He said if the bill becomes law this year, LGUs would get P487 billion next year, with the barangays getting P147 billion, municipalities at P251 billion and cities and provinces at P170 billion each.

"The passage of Senate Bill No. 2045 means the realization of your plans and programs for your municipalities. Progressive municipalities will mean progress for the rest of the Philippines," he said.

But Pimentel asked municipal mayors to be honest, saying corruption remains one of the biggest obstacles to national progress and development.

"Kalaban ng Bigger Pie, Bigger Slice ang korapsyon na siyang sumisira sa tiwala ng tao sa ating pamahalaan," he said.

This is the reason why he is seeking a Senate investigation into the Ombudsman report that for four consecutive years, LGUs topped the list of the most number of corruption cases filed against their officials.

"If we are to empower our LGUs financially, we also must make sure that there are sufficient safeguards against fiscal abuses," said Pimentel.

LGUs, he said, cannot just keep accepting funds and fail to account for every peso and centavo spent.

He urged the town mayors to adopt a resolution, urging the President and the leadership of Congress to include his bill under the priority measures to be tackled this year.

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