By Jovee Marie N. dela Cruz @joveemarie
TO beef up the financial backbone of local government units (LGUs) in time for the looming shift to federalism, a vice chairman of the House Committee on Appropriations is pushing for a measure to increase the share and guarantee the automatic retention and release of the Internal Revenue Allotment (IRA) of LGUs.
In House Bill (HB) 4697, Nacionalista Party Rep. Luis Raymund F. Villafuerte of Camarines Sur seeks to amend the Local Government Code (LGC), or the Republic Act 7160.
“Our LGUs should stop being at the mercy of the national government. Automatically releasing and retaining their respective IRAs is a major step toward genuine autonomy, and would also best prepare LGUs for the shift to the federal system of government,” Villafuerte said.
Under the bill, the share of each LGU shall be automatically released and retained by it, without need of any further action, directly to the provincial, city, municipal or barangay treasurer, as the case may be, on a quarterly basis within five days after the end of each quarter, and which shall not be subject to any lien or holdback that may be imposed by the national government for whatever purpose.
HB 4697 also increases LGUs’ collective IRA from the current 40 percent of national tax collections to 60 percent over a three-year period by amending Section 284 of the LGC.
HB 4697 also specifies that the IRA should include all types of national taxes in the formulation or computation of annual revenues due provincial, city and municipal governments.
The bill, likewise, seeks to include “all national taxes” under the IRA share of LGUs.
Once enacted into law, the proposal will increase the IRA share of LGUs to 50 percent on the first year of its effectivity, 55 percent on the second year and 60 percent on the third year.
Villafuerte said in HB 4697 that the IRA share increase would “gear up LGUs for the switch from the country’s presidential system to the LGU-friendly federal form of government, which President Duterte wants to happen by the end of his term in step with his 10-point socioeconomic agenda for accelerated poverty reduction and sustained high growth.”
“Achieving local autonomy by increasing the local governments’ IRA paves the way to the Duterte administration’s vision of decentralization by federalism. Thus, the swift congressional approval of HB 4697 would serve as a fitting prelude to greater devolution and local autonomy under the federal switch as envisioned by the President, no less,” he said.
However, in the event that the national government incurs an “unmanageable” public-sector deficit upon the effectivity of this amended IRA law, HB 4697 authorizes the President of the Philippines, upon the recommendation of the secretaries of finance, budget and of the interior and local government to make the necessary adjustments in the IRA share of LGUs, but in no case shall the amount be lower than 40 percent of all national tax earnings in the third fiscal year prior to the current one.
The bill also provides that on top of the new IRA allotment, the LGUs’ share will include the cost of devolved functions for essential public services.
In filing his bill, Villafuerte said, “Now is the most appropriate time to revisit ‘just share’ of LGUs as worded in the Constitution, in light of the looming switch to federalism that will unleash the full potentials of local governments.”
The lawmaker added that no less than the Supreme Court has, in its Ganzon v Court of Appeals ruling, stressed that the constitutional provision on local autonomy and devolution is meant to “liberate the local governments from the imperialism of Manila”.
Villafuerte also said the IRA provision in the LGC is meant to be “an integral part of local governance and local government”, and to provide LGUs with enough resources to fund the implementation of their respective programs in their pursuit of genuine political and financial autonomy from the national or central government in Manila.
“These modifications seek to truly empower and challenge the LGUs to use the additional allocation in providing better services, creating more development projects and implementing different programs to further the interests of their constituents,” Villafuerte said.