THE SENATE on Monday approved on third and final reading a priority bill that seeks to institutionalize the automatic income classification of local government units.
“This will improve local government units’ (LGUs) fiscal performance and allow our frontline government units to recruit skilled professionals for quality public service delivery,” Finance Secretary Benjamin E. Diokno said in a statement.
Twenty-two senators voted for Senate Bill 2165, which tags provinces, cities and municipalities into six classes according to their income. Two voted against it.
The Finance secretary must adjust income ranges and undertake income reclassification every three years.
The Finance chief now only has the power to recommend a change in the income brackets of provinces, cities and municipalities.
The Justice department said in a 2012 legal opinion his power “only extends to recommending such appropriate changes or revisions to the proper authority, the Philippine Congress.” This was reaffirmed in a separate legal opinion in 2015.
Bureau of Local Government Finance (BLGF) Executive Director Niño Raymond B. Alvina said the measure is crucial in shaping fiscal decentralization in local governments.
“The updated fiscal indicators will equip the BLGF to improve its oversight functions for provinces, cities and municipalities towards data-driven and performance-informed policy and decision-making at the national and local levels,” he said in a statement.
Senate Minority Leader Aquilino “Koko” D. Pimentel III, one of the senators who voted no to the measure, said there is no need to delegate this power to the Finance secretary.
The House of Representatives approved a similar measure in March.
President Ferdinand R. Marcos, Jr. sought the passage of the bill in his second state of the nation address to Congress last month.
Also on Tuesday, the House ways and means committee endorsed to the plenary a bill that seeks to reward informants on tax and Customs violations.
“This measure seeks to increase tax compliance by establishing a rationalized incentive system for informers of tax violations,” Quirino Rep. Midy N. Cua said in her sponsorship speech on Tuesday.
Under the bill, an informant who gives information that leads to the discovery of tax fraud will get a 10% commission or P10 million, whichever is higher.
If a compromise is reached with the violator, the informant will get either P10 million or 10% of the agreed amount, whichever is lower.
An informant will also get a P10-million reward or 20% of the proceeds from the sale of smuggled and confiscated goods or the collection of additional revenue, whichever is lower.
An informant must apply for the reward before the Internal Revenue and Customs commissioners. The Finance secretary will review rewards worth more than P1 million.
An informant is not entitled to a reward if no additional revenue, surcharge, fee or fine is collected, or if the information is related to an existing case.
Public officials or employees, whether incumbent, retired or separated, as well as their relatives up to the third degree will not be rewarded.
Enacting this into law would “ensure maximum efficiency in the government’s revenue collection efforts,” Ms. Cua said. — Beatriz Marie D. Cruz