November 23, 2021

The House has approved legislation to increase local governments’ share of national healthcare taxes.

On second reading, the House of Representatives approved a proposal mandating that all local government units (LGUs) set aside at least 15% of their annual national tax allotment share for health services.

The chamber passed House Bill 10392 by voice vote, which seeks to amend Section 287 of the Local Government Code of 1991 to require the appropriation of at least 15% of LGUs’ share of all national taxes or revenues for health services.

The bill requires copies of health programs, including the provision of free medicines to indigent patients of local government units, to be provided to the Departments of Interior and Local Government and Health (DOH).

LGU health programs must be approved by local health boards in accordance with the DOH’s standards and criteria, as outlined in Republic Act 11223, also known as the Universal Health Care Act.

House health committee chair Angelina Tan, who sponsored the bill, stated that, in addition to local development initiatives, the provision of quality, accessible, and relevant health services is critical, particularly in the midst of the coronavirus disease (Covid-19) pandemic.

“Based on my preliminary discussions with the Department of Health, the plan is to advocate for the renationalization of the country’s healthcare system.” However, the Mandanas-Garcia Ruling states that the ‘just share’ of local government units (LGUs) includes all national taxes, not just national internal revenue taxes, but also customs duties and others. As a result of this development, LGUs’ IRA (internal revenue allotment) is expected to rise beginning next year,” Tan explained.

Tan stated that the proposal is based on the fundamental policies outlined in Republic Act No. 11223 or the Universal Health Care Act, which takes an integrated and comprehensive approach to ensure that all Filipinos are health literate, have healthy living conditions, and are protected from hazards and risks that could harm their health.

“The pandemic has underscored the important lesson that local governments must be at the forefront of UHC implementation, because the law’requires local leaders who recognize that health is not just one of their concerns, but is in fact a strategic concern with far-reaching implications on stubborn societal issues,” she said.

The contribution of local governments to national taxes

On second reading, the chamber also approved House Bill 10296, which proposes to increase local government participation in national development by increasing LGUs’ share of national taxes.

The bill proposes to change the current formulation of the internal revenue allotment so that it includes all types of national taxes in its calculation.

The measure’s goal is to enable local governments to provide better services and launch more development projects.

It aims to raise the local government’s share of national taxes from 40% to 50% beginning with the third fiscal year preceding the current fiscal year and continuing thereafter.

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