The Internal Revenue Allotment (IRA) “just share” of the country’s local government units (LGU) under the 2019 national budget should be prospective and not retroactive, Batangas Gov. Hermilando Mandanas, chair of Calabarzon Regional Development Council, said in reference to a recent Supreme Court (SC) ruling.

“According to the Supreme Court ruling on July 3, 2018, henceforth, the IRA would be increased, including national taxes such as Customs duties, tariffs. Before, these taxes were not included, but the Supreme Court changed this, including that of the Local Government Code which stipulated that the Internal Revenue Allotment would include the national internal revenue taxes,” Mandanas said.

He proposed the P3.75-trillion budget for 2019 should be amended to implement the SC decision on the automatic release of the IRA and this should be increased by about P200 billion for next year’s budget.

He referred to the SC ruling, where the collections of the Bureau of Custom including tariffs, Customs duties and those mandated under the National Internal Revenue Code such as income tax, real estate tax, excise tax, percentage tax, value-added taxes, documentary stamp taxes and other taxes of the Bureau of Internal Revenue will be included in the IRA “just share” computation.

“The Supreme Court ruled that all the national taxes, including those from the Bureau of Customs, were not included then in the national collection of taxes, that represent IRA back pay which could reach P1.5 billion,” he said.

He said that for this year alone, the computed IRA would require a re-computation.

“The increase is not retroactive, but rather prospective only. This (IRA) includes all other national taxes, not only the national internal revenue taxes,” he said, pointing out the amount due only represents 2018 alone and is subject for re-computation for an increase for 2019.

In implementing the SC decision, the IRA of the LGU such as provinces, cities, municipalities and barangays for 2019 may be increased by close to P125 billion plus all other national taxes based on Mandanas’ claim.

“The accumulated differential has already reached approximately P1.5 trillion as the collections of the BoC of the national taxes were not included since 1992 up to the present IRA computation,” Mandanas disclosed, saying it is not on the retroactive claim but rather on the 2019 national budget prospective computation.

However, he said that reimbursements of the back IRA have to be made in consultation with the LGU and the Development and Budget Coordination Committee composed of the DBM, Department of Finance, National Economic and Development Authority, Bangko Sentral ng Pilipinas and the Office of the President.

He debunked claims that with the IRA real back pay, the national government may increase the deficit, saying this could be resolved through the reduction of the budget among line agencies — which have devolved their services to the LGU such as the departments of Social Welfare and Development, Health and Agriculture so that the budget for these devolved services would be apportioned instead to the LGU.

“Since 1992, the services of the national line agencies were already devolved such as social welfare like their assistance to the indigents, health services like treatment for dengue, barangay health center constructions that are now undertaken by the LGU, barangay roads, but the budget was not released,” the Batangas governor said.

He added that the SC decision also confirmed that the LGU have not been receiving what they should have legally received from 1992 up to the present since the devolved services also require the budget to be allocated for the LGU.

Mandanas is opting to recast the 2019 national budget, wherein there will be no change in the total amount, no need for borrowing, but at the same time, fully implementing the existing laws on local autonomy.

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.