Passage of bill increasing IRA share of LGU pushed

CEBU, Philippines - To support local development priorities and implement projects, the Cebu City Council has asked congress to pass Senate Bill 20145, which increases local government units’ Internal Revenue Allotment (IRA) share from 40 percent to 50 percent.

The bill, penned by Senator Aquilino “Koko” Pimentel III, seeks to raise the share of local government units from government tax revenues to include all national taxes, customs collections, tariffs, fees and charges, and value added taxes as allocation basis.

In a resolution, the council also requested Cebu City Representatives Raul del Mar and Rodrigo Abellanosa to lobby for the passage of the said bill.

The body likewise asked the Association of Barangay Councils and the Barangay Councilors League of the Philippines-Cebu Chapter to similarly call push for increased LGU share of government tax collections.

In a privilege speech, City Councilor Alvin Dizon noted that the major income source of LGUs is their respective IRA share, which is just 40-percent of the total internal revenue and divided among various government units; 23 percent each for all provinces and cities, 34 percent each for municipalities, and 20 percent for barangays.

Land area and population is also a determinant, with those with bigger territories and population getting bigger IRA shares.

“How just and fair is the current share that our LGUs are receiving from the national government’s allocation in the form of IRA for (it) to be truly responsive and effective in steering the progress and development of the communities and to finance anti-poverty projects and programs, which are meant to improve the quality of life of the people?” he asked.

If Pimentel’s bill get approved, Section 284 of Republic Act 716 (Local Government Code of 1991) would be amended by expanding the tax base share between the national and local governments and giving LGUs a bigger share of the expanded tax base.

Dizon said that for two decades since the Local Government Code was adopted, there has been an “inadequacy of the internal revenue shares of LGUs to meet their budgetary requirements for the full implementation of government functions.”

He said an augmentation of the LGUs IRA shares is needed, considering that they, not the national government, which deliver vital functions addressing concerns in health, education, peace and order, social services, agriculture, public fiscal management, environment and natural resources, climate change adaptation, and disaster risk reduction and management.

“This (increase) is to give flesh and spirit to the constitutional mandate of giving LGUs their ‘just and equitable’ share in the nation’s wealth,” Dizon said.

“While we push for more equitable share in the nation’s wealth to make local governance more responsive and accountable, we in the LGUs, as front-liners in the development of our communities, need to strengthen our capacity and maximize our revenue-making power to generate locally-sourced income to expand basic social service delivery, create employment opportunities, make local economic growth more sustainable and inclusive,” he added.

Dizon cited a Philippine STAR article last June 18, 2014 that reported that seven of every 10 provinces have not yet fully developed their local revenue base taxes.

The report said that after 20 years of fiscal decentralization, LGUs only get a minimal share from their annual regular income, resulting to their failure to maximize their own revenue generation capacity for basic services. — Kristine B. Quintas/RHM (FREEMAN)