THE House of Representatives on Tuesday approved on third and final reading the proposed “Automatic Income Classification Act for Local Government Units (LGUs).”
Voting 300 affirmative and 0 negative, lawmakers approved House Bill 7006, which seeks to institutionalize an income classification system reflective of the financial capability of provinces, cities, and municipalities.
The bill will be transmitted to the Senate for its consideration.
The bill mandates the Department of Finance to issue the income classification and reclassification standards of provinces, cities and municipalities. It also enumerates the income classification of provinces, cities and municipalities.
The measure provides for the automatic reclassification computation.
Under the bill, provinces shall be classified into six classes, according to income range based on the average annual income for two fiscal years preceding an automatic income reclassification.
Cities, to note, shall be classified into seven classes, also according to income range based on the average annual income for two fiscal years preceding an automatic income reclassification.
Municipalities shall be classified into six classes, according to income range based on the average annual income for two fiscal years preceding an automatic income reclassification.
The bill also provides for guidelines on personnel services for reclassification from fourth or lower income class to higher income classes.
The bill mandates the secretary of Finance to issue rules and regulations to implement the provisions of the proposal.
