Question & AnswerQ&A (PRESIDENTIAL DECREE NO. 1230)
The main purpose of Presidential Decree No. 1230 is to amend Section 86, Paragraph (b) of Presidential Decree No. 464 (the Real Property Tax Code) to increase the share of barangays, especially those in rural areas, in the basic real property tax collections to provide them more funds for operational and development projects.
It repealed sub-paragraph (1), Section 86(b) of PD 464 and replaced it with a new provision stating that starting January 1, 1978, the barangay where the property subject to the real property tax is located shall receive ten percent of the total annual collections of the province and municipality.
Prior to this amendment, barangays located in municipalities received only five percent of the provincial and municipal real property tax collections.
The provisions of PD No. 1230 took effect on January 1, 1978.
There was a need to strengthen barangays in rural areas and provide them with more funds for priority development projects, as barangays largely depend on their shares of real property tax collections for their operational requirements.
Ten percent of the total annual collections of the province and the municipality from the basic real property tax shall accrue to the barangay where the property subject to the tax is located.
All laws or parts of laws contrary to or inconsistent with Presidential Decree No. 1230 are repealed, amended, or modified accordingly.
President Ferdinand E. Marcos signed Presidential Decree No. 1230.
Jacobo C. Clave signed the decree as the Presidential Executive Assistant.
This provision increased the financial resources of barangays, allowing them to better fund their operational needs and priority development projects, particularly benefiting rural barangays.