January 14, 2025 | 12:00am
MANILA, Philippines — The Department of Finance (DOF) has reaffirmed its commitment to transparency and adherence to the Supreme Court’s Mandanas-Garcia ruling in determining the national tax allotment (NTA) shares for local government units (LGUs).
In a statement, Finance Secretary Ralph Recto assured LGUs that the DOF is strictly adhering to transparency and accountability, especially with the principles set by the Supreme Court, in implementing the Mandanas-Garcia ruling.
“Nothing is shortchanged. We are very much welcome and open to having continued dialogues with our LGUs to help them strengthen their fiscal capacities and optimize resource utilization to deliver more and better services to Filipinos,” Recto said.
The landmark 2019 Mandanas-Garcia ruling, which took effect in 2022, expanded the NTA shares of LGUs to 40 percent of all national taxes beyond those collected by the Bureau of Internal Revenue (BIR).
This adjustment aimed to bolster the fiscal autonomy of LGUs by providing a more substantial share of the national tax base.
The Supreme Court directed the DOF, along with the Department of Budget and Management, the BIR, the Bureau of Customs and the National Treasury, to include all national tax collections in the computation of the NTA base.
But this excludes special purpose funds and special allotments for the utilization and development of the national wealth.
In determining allowable deductions, the DOF is guided by constitutional provisions, particularly Section 29(3), Article VI and Section 7, Article X of the 1987 Constitution.
According to the DOF, Recto is scheduled to meet with the League of Cities next week to discuss the computation process, reflecting the DOF’s commitment to engaging with LGUs to ensure clarity and alignment with the ruling.
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