AS local government units prepare for a possible transition to federalism, the vice chairman of the House Committee on Local Government on Thursday asked the budget department to immediately heed the landmark Supreme Court decision that the Internal Revenue Allotment (IRA) for LGUs should now include all taxes collected from other government agencies apart from the Bureau of Internal Revenue, especially the value-added tax.
Rep. Luis Raymund F. Villafuerte Jr. of Camarines Sur, also the vice chairman of the House Committee on Appropriations, also urged the Department of Budget and Management (DBM) to work out a plan on how the full IRA due LGUs since 1992—based on the SC ruling—can be given out to them.
Villafuerte, citing estimates by Batangas Gov. Hermilando I. Mandanas and former Senate President Aquilino Q. Pimentel Jr., said in a statement the IRA based on all national taxes that were withheld from LGUs amounts to about P800 billion from 2010 to 2016 alone.
Federalism
Meanwhile, Villafuerte said this landmark ruling would help the national government in boosting the economy of LGUs once the country commences the shift to a federal system of government.
As then-chairman of the League of Provinces of the Philippines —the organization of the country’s governors—during the former Arroyo administration, Villafuerte was a staunch backer of Mandanas and the late Bataan Gov. Enrique Garcia Jr. in advocating the automatic allocation of the LGUs’ IRA as so provided in the 1987 Constitution.
Mandanas first filed a petition on this IRA share of LGUs during the Arroyo presidency and, as a Batangas congressman, filed another case before the SC under the Aquino administration, calling for the immediate release of the IRA back pay of local governments.
“We call on the DBM to come up with a viable plan on how the IRA back pay could be efficiently distributed immediately to LGUs,” he added.
“A much higher IRA share would certainly boost the fiscal autonomy of LGUs ahead of the imminent switch in government structure from the presidential to the federal system,” said Villafuerte.
He said one key ingredient for the subsequent success of the federal shift is the greater fiscal autonomy of local governments to chart their respective development programs and adequate financial resources to bankroll their own projects designed to spur local economic growth.
Long-delayed
Meanwhile, Senior Deputy Minority Leader Lito L. Atienza of Buhay welcomed the SC ruling, calling it a long-delayed interpretation of the constitutional guarantee on local autonomy.
“As it is, LGUs only get their 40-percent share from national internal revenue taxes,” Atienza said.
Section 6, Article X of the 1987 Constitution states that local government units shall have a just share, as determined by law, in the national taxes which shall be automatically released to them.
“LGUs don’t get any share at all from other taxes collected. With the implementation of the provisions of the Local Government Code, national functions such as those on health services have been devolved to LGUs. However, previous presidents opted to devolve the functions of several departments but refused to share the revenues with the LGUs. They still do not have fiscal autonomy. This is also the reason why complaints continue to hound LGUs over their perceived failure to provide better services to their constituents,” said Atienza.