Federated Regions to Have Five Sources of Income – Former CJ Puno

Retired Chief Justice Reynato S. Puno and Chairman of the Consultative Committee to Review the 1987 Constitution said that federalism would provide more sources of income than what is being received by the present local government units.

In a recent forum on federalism, he said that there is no basis to the apprehensions of some local government units and critics that federated regions cannot survive under federalism because it would not have enough fiscal and financial resources.

Puno said that under the draft constitution, the federated regions would have five sources of revenues. First, is the power to levy and collect taxes, licenses, and fees to include documentary stamp tax; donor’s tax; estate tax; real property tax; franchise tax; professional tax; games and amusement tax; road user’s tax; vehicle registration fees; transport franchise fees; environmental tax; and other taxes which may be granted by the federal law.

Second, he said, that the federated regions shall be given a share of not less than 50 percent of all the collected income taxes, excise taxes, value-added taxes, and customs duties which shall be equally divided among all federated regions.

The third source of income, Puno said, is the equalization fund which shall not be less than three percent of the annual Generals Appropriations Act.

Also, the federated regions shall be entitled to 50 percent of all net revenues derived from the exploration, development, and utilization of all natural resources within their territory.

Puno said that Congress, through the annual General Appropriations Act, may provide additional finances for the regions to effectively and efficiently deliver government services to constituents.

The Forum on Federalism – “Power to the People: Bayanihan Federalism, Power to the Regions” was organized by the Regional Development Council-Mimaropa Region through its secretariat the National Economic and Development Authority Mimaropa Office.

About 70 members of the council attended the forum including local chief executives, directors of the different regional line agencies, representatives of state universities and colleges, and private sector representatives. (NEDAR4B/Oriental Mindoro)