NEW TAX SCHEME PROPOSED
AGUSAN del Norte Second District Rep. Dale Corvera has filed a bill that aims to incorporate municipal waters as an additional consideration for calculating local governments’ proportional share of the national taxes allocation (NTA), formerly known as the international revenue allotment (IRA).
Corvera’s House Bill 6102 would amend Section 285 of the Local Government Code, which establishes how much a local government unit (LGU) receives based on population, land area and equal sharing.
“The Philippines is an archipelagic country, and more than 50 percent of its LGUs are considered coastal, and, therefore, the area of municipal waters, aside from the land area, should be included in determining the share of LGUs in the NTA,” he said.
For LGUs that have to manage large municipal waterways, the existing method for calculating NTA shares is supposedly unreasonable.
The area of municipal waters is not now taken into account in the allocation of national taxes, but coastal LGUs are still required by law to provide services, programs and facilities for the protection, promotion and preservation of the municipal waters.
“The LGUs are responsible for the management, conservation, development, protection, utilization and disposition of all fish and fishery or aquatic resources within their respective municipal waters, yet no corresponding adjustments were made in the factors used to determine the NTA,” Corvera said.
“This is over and above the fact that coastal LGUs are the most exposed to huge damages and displacements during typhoons, storm surges and tsunamis, and they are obliged to spend on projects and programs to prevent loss of life and property due to these events,” he added.
The Corvera bill states that the following allocation shall be used to calculate each province’s, city’s, and municipality’s share: (a) population: 50 percent;
(b) land area and area of municipal waters: 25 percent; and (c) equal sharing: 25 percent.
As a result of the Philippines’ high position on the World Risk Index 2022, he pointed out the significance of taking municipal waters into account because the Philippines is more exposed and susceptible to cyclones, storm surges, tsunamis and other natural disasters affecting coastal areas.
According to Corvera’s experience as the mayor and governor of a coastal LGU, he thinks that in order for the LGUs to receive a truly equitable share of the national taxes, Section 285 of the Local Government Code needs to be amended to address a deeper problem by taking into account the municipal waters in addition to the land area factor.