IRA BACK PAY. Batangas Governor Hermilando Mandanas (2nd from left), chair of the Calabarzon Regional Development Council (RDC), discusses the status of the Internal Revenue Allotment (IRA) for local government units under the 2019 National Budget, during the Calabarzon RDC Executive Commitee press conference at Hotel Marciano, Real Road in Calamba City on Wednesday afternoon (July 17). Joining him (from left) are RDC co-chair Engr. Ladislao L. Andal, RDC vice-chair and NEDA-Calabarzon Regional Director Luis G. Banua and DILG-Calabarzon Regional Director Manuel Q. Gotis. (Photo by Saul Pa-a)
CALAMBA CITY, Laguna – Batangas Governor Hermilando Mandanas, chairs of Calabarzon Regional Development Council (RDC), clarified on Wednesday that the Internal Revenue Allotment (IRA) “just share” to the country’s Local Government Units (LGUs) under the 2019 National Budget should be prospective and not retroactive.
Mandanas presided over the Calabarzon RDC Executive Committee Meeting here on Tuesday, which tackled the IRA advocacy updates, General Appropriations Act (GAA) or the National Budget, Federalism and the utilization of the RDC Trust Fund for 2018.
Joining Mandanas at the RDC Executive Committee press conference on Tuesday afternoon were RDC co-chair Engr. Ladislao L. Andal, RDC vice-chair and National Economic Development Authority (NEDA)-Calabarzon Regional Director Luis G. Banua and Department of the Interior and Local Government (DILG)-Calabarzon Regional Director Manuel Q. Gotis.
“According to the Supreme Court ruling on July 3, 2018, henceforth, ang IRA ay dadagdagan pa at ito ay kasama pa ang national taxes kasama ang customs duties, tariffs. Dati, hindi talaga kasama yan, pero binago ng Supreme Court at ang Local Government Code ang nagsasabi na ang Internal Revenue Allotment ay mangagaling lamang sa mga national internal revenue taxes (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 that the PHP 3.75-trillion National 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 PHP200 billion for next year’s budget.
He referred to the SC ruling, where the collections of the Bureau of Customs (BOC) 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 (VAT), documentary stamp taxes (DST), and other taxes of the Bureau of Internal Revenue (BIR) will be included in the IRA “just share” computation.
“Sabi ng Supreme Court, lahat na ng national taxes na dati yung Customs hindi sinasama yung national collection ng taxes, kaya meron silang hindi binayaran sa IRA na umabot na sa PHP1.5 billion (The Supreme Court ruled that all the national taxes where those from the Customs were not included then in the national collection of taxes, that represent IRA back pay which could reach PHP 1.5 billion),” he said.
He said that for this year alone, the computed IRA would require a re-computation.
“Ang dagdag hindi retroactive, kundi prospective lang. Idagdag dito lahat ng national taxes, hindi lang national internal revenue taxes (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 that 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 LGUs such as provinces, cities, municipalities, and barangays for 2019 may be increased by close to PHP125 billion plus all other national taxes based on Mandanas’ claim.
“The accumulated differential has already reached approximately PHP 1.5 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 has to be made in consultation with the LGUs and the Development and Budget Coordination Committee (DBCC) composed of the DBM, Department of Finance (DOF), National Economic and Development Authority (NEDA), Bangko Sentral ng Pilipinas (BSP) 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 LGUs such as the departments of Social Welfare and Development, Health, Agriculture so that the budget for these devolved services would be apportioned instead to the local government units (LGUs).
“Simula pa noong 1992, yung trabaho ng mga National Line Agencies were already devolved such as social welfare tulad ng tulong sa mga mahihirap, health services yung pagpagamot tulad ng dengue, barangay health center na ang gumagawa na ang mga LGUs, barangay roads, pero yung pera hindi binibigay (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 LGUs, barangay roads, but the budget was not released),” the Batangas governor said.
He added that the SC decision also confirmed that the LGUs 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 LGUs.
The Calabarzon RDC chair 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.
The basic services of the Departments of Agriculture, Health, Social Welfare and Development, Tourism and Public Works and Highways (DPWH) which have been devolved to the LGUs pursuant to the Local Government Code, can still be funded through increasing the LGUs IRA share by the National Government.
“Ang ginawa ng Supreme Court ay makatarungan, tataas ang IRA, ang pananalapi at mapupunta sa mga barangay, sa mga bayan-bayan nang sa ganun, hindi lang ang central government ang may pera, kung tawagin ay subsidiarity (the Supreme Court has ruled for justice, increasing the IRA, the budget and this would go to the barangays, towns and LGUs where it’s not only the central government that has the budget, but through this system of subsidiarity),” Mandanas explained, adding that the local government can do as planned provided they have the allocated funds required.
He described this approach in making government transaction more transparent, more efficient, economical and expedient governance and putting development in the grassroots. (PNA)
