“…LGUs with their development level measured by the development index. The main changes in the grant distribution to LGUs involve redirecting the grants from the state budget to LGUs, according to the development index, in the amount of corporate income tax generated in their area, and changes in the basic personal allowance (Bajo and Primorac, 2013). By this, LGUs classified in categories I and II will obtain the right to the entire (100%) corporate income tax revenue collected in their area, in category III to aid in the amount of 75%, in group IV 60%, and in category IV 40%.…”