House constitutional panel considering expanded local gov’t IRAs

By February 14, 2020Property News

THE House committee on constitutional amendments is considering including among its recommended changes to the charter a provision to expand internal revenue allotments (IRAs) for provinces, cities, towns, and barangays throughout the country, its chairman said.
The committee’s chairman, Cagayan de Oro Rep. Rufus B. Rodriguez said in a statement on Friday that he and several committee members are supporting the proposal of the administration’s Inter-Agency Task Force on Constitutional Reforms for a larger IRA for LGUs.
IRAs are payments from the national government representing LGUs’ share of the national government’s income, and makeup a significant portion of local government budgets
“LGUs are entitled to it. That is what the Supreme Court (SC) has declared in the Mandanas case,” he said, referring to a petition filed by Batangas Governor Hermilando I. Mandanas.
The SC ruling expanded the basis for calculating the IRA to include not only taxes collected by the Bureau of Internal Revenue but the Bureau of Customs as well. It also included half of the value added tax (VAT) from the autonomous Muslim region, 60% of levies from the exploitation of natural wealth, and half of VAT on the sale of goods and properties.
At present, IRA is computed based on “internal revenue taxes,” or those collected by the Bureau of Internal Revenue.
This year, P649 billion was appropriated in the national budget for IRA payments, he said.
According to a study by the Department of Interior and Local Government (DILG), Mr. Rodriguez said LGUs will come in for an IRA payment of P1.12 trillion in 2022 if the calculations were compliant with the SC ruling, some P313 billion more than they would get under the current method of reckoning IRA.
Mr. Rodriguez said the expanded IRA ruling would give provinces an additional P268 billion, and cities, towns and barangays P268 billion, P397 billion and P233 billion, respectively.
The Department of Finance has opposed the immediate implementation of the SC ruling because of its “negative impact” on national finances, Mr. Rodriguez said.
President Rodrigo R. Duterte has created a task force to come up with the administration’s recommended Constitutional amendments. The group, composed of nine agencies, is chaired by Local Government Secretary Eduardo M. Año, with Justice Secretary Menardo I. Guevarra as vice chairman.
The task force has proposed constitutional provisions against political dynasties and party turncoats, election of senators by region, five-year terms for members of the House of Representatives and local officials, the lifting of limitations on foreign investment, and a state subsidy for political parties.
Most of the task force’s proposed constitutional amendments “jibe” with those contained in the committee’s initial report, Mr. Rodriguez said.
The House committee will meet next week to vote on which proposals of the task force it will include in its report to Speaker Alan Peter S. Cayetano. — Genshen L. Espedido