Finance

Intergovernmental Finance and Paying a Share of the Cost Incurred by Provincial Governments for Infrastructure Improvements

The control of funds is in the central government and it determines the distributable pool of resources.This is a Type D grant. It is a shared type of grant because it comes from the national tax. It however under the discretion of the central government where the 10% incomes tax will be allocated that is why it is Type D which is an ad hoc type of shared tax.IV. Annually the national government determines the amount of aid it will provide to subnational governments. The distribution of this financial aid is based on population density, the percentage of citizens under the age of fifteen, and the average household income.This is a Type F grant. This is an ad hoc transfer since it is under the central government’s discretion where to allocate the funds. It is further classified under the formula type of ad hoc transfer since the division of funds for allocation will be based on the computation of certain objective criteria and elements, in this case, population density, household income and percentage of a citizen under 15.This is a Type K grant. This is a type of reimbursable expenditure based on an emergency situation in a local unit. The funds will be approved and will come from the central government and the funds to be allocated would be the total or partial cost needed by the local government.VI. Local governments receive 40 percent of the motor vehicle license fees collected by the provincial government. The fees are allocated to the local governments based on the percentage of motor vehicles the province that is owned by residents in a particular local government jurisdiction.This is a Type B grant. It is a shared type of government funds but instead of being a national tax, the funds are from the provincial government collected from regular fees collected for the issuance of motor vehicle license. Forty percent is allocated to the local unit based on certain elements, in this case, the percentage of a motor vehicle owned by residents in a certain province.

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