House mulls larger IRA for LGUs under Cha-Cha

The House of Representatives’ committee on constitutional amendments will consider the inclusion in its Charter Change recommendations of a provision on larger Internal Revenue Allotments for provinces, cities, towns, and barangays throughout the country.

Rep. Rufus Rodriguez of Cagayan de Oro’s second district, the committee’s chairman,  on Friday said 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.

“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 Gov. Hermilando Mandanas.

The  committee will meet next week to vote on what proposals of the task force it would include in its Cha-Cha report to be submitted to Speaker Alan Peter Cayetano.

President Duterte has created the task force to come up with the administration’s Cha-Cha recommendations. The group, composed of nine agencies, is chaired by Local Government Secretary Eduardo Año, with Justice Secretary Menardo Guevarra as vice chairman.

Based on a study done by the Department of the Interior and Local Government, Rodriguez said LGUs would have a total of P1.116 trillion in IRA in 2022 with the SC ruling, or P313 billion more than if their allocations were computed without the high court’s decision.

For this year, P649 billion is appropriated in the national budget as the LGUs’ IRA, which represents the share of local governments from national taxes, he said.

At present, IRA, which represents the LGUs’ share of national taxes, is computed based on “internal revenue taxes,” or those collected by the Bureau of Internal Revenue. They do not include collections by the Bureau of Customs. 

The SC ruling expanded the base to include not only taxes collected by the BIR but Customs as well, and other impositions, including half of value added tax (VAT) from the autonomous Muslim region, 60 percent of levies from the exploitation of natural wealth, and half of VAT on the sale of goods and properties.

Citing the DILG study, Rodriguez said the expanded IRA ruling would give provinces an additional P268 billion, while cities, towns and barangays would gain P268 billion, P397 billion and P233 billion, respectively.

He said in the case of Camarines Sur, its IRA would increase by P1.140 billion to P4.85 billion, while Makati’s share would jump by P556 million to P2.364 billion.

The town of Taytay in Rizal would have P263 million more, from P856 million to P1.119 billion, he said.

The Department of Finance has opposed the immediate implementation of the SC ruling because of its negative impact on the country’s finances.

Among the other Cha-cha proposals of the DILG-led task force are provisions against political dynasties and turncoats, election of senators by region, five-year term for members of the House of Representatives and local officials, lifting of limitations on foreign investments, and state subsidy for political parties.

Rodriguez said most of the administration group’s proposed constitutional amendments jibe with those contained in its committee’s initial report. 

Topics: House of Representatives , Internal Revenue Allotments , IRA , Local Government Units , LGUs , Charter Change
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