Statement on the Meeting with the DOF Secretary Ralph G. Recto on the National Tax Allotment


By LCP Secretariat
January 16, 2025 - Quezon City


 
The League appreciates Secretary Ralph G. Recto's time and effort in discussing the computation of the national tax allotment (NTA). We also appreciate the transparency in the data presented by the Department of Finance and are grateful for the key officials from the Department of Finance who joined the dialogue. Both parties agree that LGUs received 32\\\\% and not 40\\\\% of the NTA due to the exclusion of special purpose funds and special allotments from the national tax base. 
 
The dialogue provides a platform for healthy and meaningful engagement with the DOF on matters important to the LGUs, such as the NTA. The DOF maintains that the deductions on the national tax base are based on existing laws resulting from the landmark Mandanas-Garcia decision in 2018. The LCP, on its part, is committed to further studying the data presented by the DOF to ensure a thorough understanding. 
 
The League welcomes DOF's report for an NTA increase in 2026 as two laws are set to lapse, particularly the Tax Reform for Acceleration and Inclusion (TRAIN) Law and Universal Health Care (UHC) Law. Incremental revenues from these laws will be included in the 2026 NTA computation, which could bring an additional three percent (3\\\\%) to the LGU allocation, promising a brighter fiscal future for the LGUs.  
 
The dialogue galvanized the value of constructive engagement with the Executive Department and the Legislature on matters affecting the national tax base for a more meaningful fiscal decentralization and devolution. It underscores the need for a concerted effort and vigilance among local government units to scrutinize proposals that will impact the NTA, making each LGU an active participant in shaping its fiscal future. 
 
 
Mayor Joy G. Belmonte
Quezon City
LCP Acting National President
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