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See all Premium member Presentation Transcript The local government units : The local government units Public Fiscal Administration Created by: Frietze Nono Topic Outline : Topic Outline Introduction Overview of the Local Government Units a. The Local Government Code of 1991 -Barangay -Municipality -City -Province III. Organizational Responsibilities of LGUs Public Fiscal Administration IV. Taxation/Revenue a. Major source of revenue b. Tax collection sharing & assignment c. Tax administration & organization V. Current issue & development Introduction : Introduction The Local Government Units are subdivided into 81 provinces, 136 cities, 1,495 municipalities and 42,008 barangays (as of December 31, 2008). The LGUs are grouped into seventeen (17) regions based on their geographical locations. According to the Constitution, the LGUs "shall enjoy local autonomy", and in which the president exercises "general supervision". Congress enacted the “Local Government Code of 1991” which shall provide for a more responsive and accountable local government structure instituted through a system of decentralization with effective mechanisms of recall, initiative, and referendum, allocate among the different local government units their powers, responsibilities, and resources, and provide for the qualifications, election, appointment and removal, term, salaries, powers and functions and duties of local officials, and all other matters relating to the organization and operation of local units. Slide 4: A political subdivision of a nation or state constituted by law, which has substantial control over local affairs including the power to impose taxes, the governing body of which is elected or appointed. What is Local Government? Major Concepts of Local Government : Major Concepts of Local Government A political subdivision of the national government excluding the field offices of line agencies geographically located within the jurisdiction of LGU’s The geographic area where all government units, including the field offices of line agencies of the national government are considered as part of the LGU’s The Purpose of Creation of the LOCAL GOVERNMENT CODE of 1991 : The Purpose of Creation of the LOCAL GOVERNMENT CODE of 1991 The Local Government Code of 1991 : The Local Government Code of 1991 1. Allocates more powers, functions, responsibilities and resources among local government units. The Local Government Code of 1991 : The Local Government Code of 1991 2. Mandates the establishment in every LGU of an accountable, efficient and dynamic organizational structure and operating mechanisms that meet the priority needs and service requirements of the communities. The Local Government Code of 1991 : The Local Government Code of 1991 3. Allows the LGUs to group themselves, consolidate or coordinate their efforts, services, and resources for purposes that will benefit them all. The Local Government Code of 1991 : The Local Government Code of 1991 4. Allows the LGUs to participate actively in the implementation of national programs and projects to enhance their capabilities. The Local Government Code of 1991 : The Local Government Code of 1991 5. Enjoins the State to share with LGUs the responsibility of managing and maintaining ecological balance within their territorial jurisdictions. The Local Government Code of 1991 : The Local Government Code of 1991 6. Provides penalties and sanctions for acts that violate it provisions. The Local Government Code of 1991 : The Local Government Code of 1991 7. Lays down the mechanisms that ensure the accountability of LGUs to their respective constituents. The Local Government Code of 1991 : The Local Government Code of 1991 8. Allows and encourages people’s and non-governmental organizations and the private sector to participate actively in local governance, particularly in the delivery of basic services, to ensure the viability of local autonomy as an alternative strategy for sustainable development. Levels of Local Government in the Philippines : Levels of Local Government in the Philippines Levels of Local Government in the Philippines : Levels of Local Government in the Philippines Barangay Levels of Local Government in the Philippines : Levels of Local Government in the Philippines Barangay Levels of Local Government in the Philippines : Levels of Local Government in the Philippines Barangay Levels of Local Government in the Philippines : Levels of Local Government in the Philippines Barangay Levels of Local Government in the Philippines : Levels of Local Government in the Philippines Barangay LGU Requisites for Creation : LGU Requisites for Creation Rules of Local Government Units : Rules of Local Government Units Functions of Local Government : Functions of Local Government Taxation/Revenue : Taxation/Revenue Slide 25: What is Taxation? A system of raising money to finance government. All governments require payments of money—taxes—from people. Governments use tax revenues to pay soldiers and police, to build dams and roads, to operate schools and hospitals, to provide food to the poor and medical care to the elderly, and for hundreds of other purposes. Without taxes to fund its activities, government could not exist. Slide 26: What is Revenue? It is a government income. The income of a government from all sources, used to pay for a nation's expenses. Slide 27: Philippine Tax Structure The Bureau of Internal Revenue under the Department of Finance administers taxation. Its main functions consist of assessment, collection, processing and tax payer assistance. It is headed by a Commissioner who has the exclusive and original jurisdiction to interpret the provisions of the code and other tax law. Major Source of Revenue : Major Source of Revenue Tax of Transfer of Real Property Ownership Tax on Business of Printing & Publication Franchise Tax Tax on Sand, Gravel and other Quarry Resources Professional Tax Amusement Tax Annual Fixed Tax Tax of transfer of real property ownership : Tax of transfer of real property ownership tax on the sale, donation, barter, or on any other mode of transferring ownership or title of real property at the rate of not more than fifty percent (50%) of one percent (1%) of the total consideration involved in the acquisition of the property or of the fair market value in case the monetary consideration involved in the transfer is not substantial, whichever is higher. Tax on business of printing and publication : Tax on business of printing and publication tax on the business of persons engaged in the printing and/or publication of books, cards, posters, leaflets, handbills, certificates, receipts, pamphlets, and others of similar nature, at a rate not exceeding fifty percent (50%) of one percent (1%) of the gross annual receipts for the preceding calendar year Franchise Tax : Franchise Tax the province may impose a tax on businesses enjoying a franchise, at a rate not exceeding fifty percent (50%) of one percent (1%) of the gross annual receipts for the preceding calendar year based on the incoming receipt, or realized, within its territorial jurisdiction. In the case of a newly started business, the tax shall not exceed one-twentieth (1/20) of one percent (1%) of the capital investment Tax on sand, gravel and other quarry resources : Tax on sand, gravel and other quarry resources The province may levy and collect not more than ten percent (10%) of fair market value in the locality per cubic meter of ordinary stones, sand, gravel, earth, and other quarry resources, as defined under the National Internal Revenue Code, as amended, extracted from public lands or from the beds of seas, lakes, rivers, streams, creeks, and other public waters within its territorial jurisdiction Professional Tax : Professional Tax annual professional tax maybe imposed on each person engaged in the exercise or practice of his profession requiring government examination at such amount and reasonable classification as the sangguniang panlalawigan may determine but shall in no case exceed Three hundred pesos (P=300.00). Amusement Tax : Amusement Tax an amusement tax maybe collected from the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia, and other places of amusement at a rate of not more than thirty percent (30%) of the gross receipts from admission fees. Tax Collection Sharing : Tax Collection Sharing Tax Collection Sharing : Tax Collection Sharing forty percent (40%) of the gross collection derived by the national government from the preceding fiscal year from mining taxes, royalties, forestry and fishery charges, and such other taxes, fees, or charges, including related surcharges, interests, or fines, and from its share in any co-production, joint venture or production sharing agreement in the utilization and development of the national wealth within their territorial jurisdiction Allocation of Share : Allocation of Share Allocation of shares : Allocation of shares a. Where the natural resources are located in the province 1. province - Twenty percent (20%); 2. Component city/municipality - Forty-five percent (45%); and 3. barangay - Thirty-five percent (35%) Provided, however, That where the natural resources are located in two (2) or more provinces, or in two (2) or more component cities or municipalities or in two (2) or more barangays, their respective shares shall be computed on the basis of: Population - Seventy percent (70%); and Land area - Thirty percent (30%). Allocation of shares : Allocation of shares b. Where the natural resources are located in a highly urbanized or independent component city: 1. city - Sixty-five percent (65%); and 2. barangay - Thirty-five percent (35%) Provided, however, That where the natural resources are located in such two (2) or more cities, the allocation of shares shall be based on the formula on population and land area as specified in paragraph (a) of this Section. Local Fiscal Administration : Local Fiscal Administration Slide 41: What is Fiscal? Relating to public revenues, especially the revenue from taxation. Slide 42: What is Local Fiscal Administration? Local fiscal administration refers to systems, structures, processes, resources, and the policy environment governing the inter-governmental and inter-local fiscal relations. Organizational Responsibilities of LGU to Local Fiscal Administration : 1. the giving of allotments and grants by the national government (NG) to local government units (LGUs); 2. sharing of taxing powers between the NG and the LGUs, and among LGUs units; 3. policy on tax rates and structure; 4. revenue and expenditure planning; 5. revenue utilization and expenditure allocation; 6. monitoring and approval of budgets, tax ordinances and other fiscal measures; 7. policy on borrowing and borrowing instruments; and 8. appointment and supervision of local fiscal officers. . Organizational Responsibilities of LGU to Local Fiscal Administration Fundamental Principles : Fundamental Principles (a) No money shall be paid out of the local treasury except in pursuance of an appropriations ordinance or law; (b) Local government funds and monies shall be spent solely for public purposes; (c) Local revenue is generated only from sources expressly authorized by law or ordinance, and collection thereof shall at all times be acknowledged properly; Fundamental Principles : Fundamental Principles (d) All monies officially received by a local government officer in any capacity or on any occasion shall be accounted for as local funds, unless otherwise provided by law; (e) Trust funds in the local treasury shall not be paid out except in fulfillment of the purpose for which the trust was created or the funds received; (f) Every officer of the local government unit whose duties permit or require the possession or custody of local funds shall be properly bonded, and such officer shall be accountable and responsible for said funds and for the safekeeping thereof in conformity with the provisions of law; Fundamental Principles : Fundamental Principles (g) Local governments shall formulate sound financial plans, and the local budgets shall be based on functions, activities, and projects, in terms of expected results; development plans, goals, and strategies in order to optimize the utilization of resources and to avoid duplication in the use of fiscal and physical resources; (i) Local budgets shall operationalize approved local development plans; (j) Local government units shall ensure that their respective budgets incorporate the requirements of their component units and provide for equitable allocation of resources among these component units; Fundamental Principles : Fundamental Principles (k) National planning shall be based on local planning to ensure that the needs and aspirations of the people as articulated by the local government units in their respective local development plans are considered in the formulation of budgets of national line agencies or offices; (l) Fiscal responsibility shall be shared by all those exercising authority over the financial affairs, transactions, and operations of the local government units; and (m) The local government unit shall endeavor to have a balanced budget in each fiscal year of operation. Other Issues & Concerns : Other Issues & Concerns Other Issues & Concerns : Other Issues & Concerns It became the source of corruption Corruption such as bribery, extortion, embezzlement & graft Inadequate funds for the development of each local government unit Political clan strengthened when more power were devolved from the national government LGUs are having hard time in collecting taxes. The End : The End You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.