Guidelines on the Rendition of Overtime Services in the Judiciary

June 6, 2011 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION The Honorable Benjamin Dr. Asilo Chairman, Committee on People's Participation House of Representatives Batasan Hills, Diliman Quezon City, Metro Manila RE : HB No. 4374, "An Act to Strengthen Nation Building Through the Institutionalization of a Strategic Volunteerism Based Multi-Sectoral Public-Private Partnership Framework, in all Local Government Units and Congressional Districts in the Country, and for Other Purposes," Principally Authored by the Honorable Speaker Feliciano R. Belmonte, Jr. Sir : This refers in particular to the proposed provisions of Section 10 of the aforecited HB No. 4374, regarding the creation of a Special Housing Fund (SHF) to be sourced from the imposition of one percent (1%) tax on the assessed value of real property, in addition to the existing real property taxes (RPTs) provided for under Sections 232 (basic RPT) and 235 (SEF) of R.A. No. 7160, otherwise known as the Local Government Code of 1991. It may be noted that Section 43 of R.A. No. 7279, otherwise known as the Urban Development Housing Act of 1992, also authorized local governments to impose a tax of one-half percent (0.5%) on the assessed value of all lands in urban areas in excess of Php50,000.00, for housing program. RPT is the most important and ideal source of revenue for local governments. In the country, RPT is the largest contributor to the total own-source revenues of LGUs, and remains to be the most reliable income source where local governments can raise an overwhelming share of their own-source tax revenues. The steady and consistent growth of the RPT and the immobility of the tax base provides LGUs a flexible and stable income upon which local fiscal autonomy may be achieved to obtain genuine and meaningful autonomy of LGUs which continue to elude them through all the years. There is the connection of RPT with local autonomy. HcACST Along this line, we are of the view that legislating an additional flat and uniform 1% RPT in all LGUs which shall be accounted for in the SHF to be created is perceived as anti-local autonomy, besides, not in conformity with the new administration's pronouncement on "no new or additional taxes". Considering, however, the laudable objective of housing for the poor sector of our society and recognizing the principle of subsidiary responsibility of LGUs, we hereby propose that instead of a legislated flat and uniform additional 1% RPT which apparently is an additional rider just like the Special Education Fund (SEF), increase rather the existing 1% and 2% ceiling of the RPT rates for provinces and cities, respectively, to 0.5%, and let the local councils ( sanggunian ) decide the RPT rate appropriate to their LGU. Then legislate that LGUs should set aside an amount for socialized housing purposes to be accounted for in a special account under the General Fund (GF). The creation of a special account under the GF enhances LGU capacity to adjust the kind and level of services and tax burdens according to the desires of their constituents. In urbanized LGUs, the funding may be sourced from the aforementioned additional 0.5% tax on the assessed value of lands in excess of Php50,000.00, under Section 43 of R.A. No. 7279, otherwise known as the Urban Development and Housing Act. In case this proposal merits the consideration of the Honorable Committee, we are willing to work further with you in refining the details thereof. DTIcSH Very truly yours, (SGD.) MA. PRESENTACION R. MONTESA Executive Director