President Marcos has signed into law Republic Act (RA) No. 11964, also known as the Automatic Income Classification of Local Government Units Act, 26 October 2023.
RA 11964 institutionalizes the automatic income classification of local government units (LGUs) to promote local autonomy and enable LGUs to realize their full economic potential.
Under the law, municipalities shall be classified into five classes, based on their income ranges and the average annual regular income for three fiscal years preceding a general income reclassification.
The first general income reclassification shall be made within six months after the effectivity of the law and every three years from then on.
RA 11964 also states that the first income reclassification of provinces, cities, and municipalities will take effect on January 1st of the immediately succeeding year following the issuance of the table of income classification by the Finance Secretary.
The Automatic Income Classification of Local Government Units bill is part of the Common Legislative Agenda (CLA) of the Legislative-Executive Development Advisory Council (LEDAC).
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