BAGUIO CITY—The Supreme Court has maintained its decision which declared that the internal revenue allotment (IRA) share of all local government units should be based on the collections of all national taxes, and not only from national internal revenue taxes collected by the government.
At a press briefing, SC Public Information Office chief and spokesman Brian Hosaka said the Court made the decision at its en banc session on Wednesday here in the country’s summer capital.
Hosaka said the magistrates denied the motions for reconsideration (MR) filed by the Office of the Solicitor General (OSG) and the camp of the late Bataan Gov. Enrique T. Garcia Jr.
In its MR, Solicitor General Jose Calida insisted that the Court erred in expanding the basis of the IRA of the LGUs to include all national taxes.
In its July 3, 2018, decision, the Court increased the IRA of LGUs to include the tax collection of other agencies aside from the BIR as basis for the computation.
It included tariff and duties collected by the Bureau of Customs, 50 percent of value-added tax, 30 percent of national taxes collected in the Autonomous Region in Muslim Mindanao, 60 percent of national taxes collected from the exploitation and development of national wealth, 85 percent of excise tax from tobacco products, and a portion of franchise tax under Republic Acts 6631 and 6632 (Horse Racing Laws), among others.
On the other hand, Garcia’s camp filed an MR to seek partial reconsideration of the decision, saying that it should be implemented retroactively; thus, all arrears since 1992 resulting from the application of the expanded basis in computing the IRAs should be given to the LGUs.
“In denying both motions for reconsideration, the Supreme Court clarified that the adjusted amounts of the IRAs of the LGUs are deemed effective only after the finality of the ruling of the Court. Hence, the adjusted amounts will be given to the LGUs starting with the 2022 budget cycle,” Hosaka explained.
The Court’s decision stemmed from the petition filed in January 2012 by former Batangas 2nd District Representative and now Provincial Governor Hermilando Mandanas.
The SC voted 10-3 to partially grant the petition of Mandanas, who had questioned the process of allocating IRA funds for the LGUs.
Section 284 of Republic Act 7160, which created LGUs, stated that provincial, city and municipal governments should receive 40 percent of total national internal revenue taxes collected by the national government.