The Department of Finance (DoF) has reiterated its dedication to openness and rigorous adherence to the Supreme Court (SC) ruling and applicable legislation in establishing the National Tax Allotment (NTA) shares for local government units (LGUs).
“We reassure our LGUs that we are firmly committed to transparency and responsibility, particularly in line with the principles set forth by the Supreme Court, in executing the Mandanas-Garcia ruling. Nothing is overlooked. We are very receptive and open to maintaining dialogues with our LGUs to assist them in enhancing their fiscal abilities and maximizing resource utilization to provide more and improved services to Filipinos,” Finance Secretary Ralph G. Recto stated.
The 2019 Mandanas-Garcia ruling from the SC, which became effective in 2022, elevated the NTA shares of LGUs to 40% of all national taxes apart from those collected by the Bureau of Internal Revenue (BIR). This adjustment was aimed at augmenting the fiscal independence of LGUs by granting them a greater portion of the national tax base.
In its ruling, the SC directed the Secretary of the DoF, the Secretary of the Department of Budget and Management (DBM), the Commissioners of the BIR and the Bureau of Customs (BoC), along with the National Treasury, to incorporate all national tax collections when calculating the NTA base, “with the exception of those allocated to special purpose funds and special allotments for the use and development of national wealth.”
In calculating the deductions, the DoF is directed by the SC ruling, including Section 29 (3), Article VI and Section 7, Article X of the 1987 Constitution.
The Finance Secretary is scheduled to convene with the League of Cities in the upcoming week to deliberate on the calculation of the NTA.
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