Local government units to receive P40-billion increase in internal revenue allotments

MANILA, Philippines - Local government units (LGUs) will receive a P40-billion increase in their internal revenue allotments (IRA) from tax collections of the National Government, President Arroyo announced yesterday.

Citing the role of LGUs in helping build a stable economy, Mrs. Arroyo, in her speech at the convention of the Vice Mayors’ League of the Philippines in Cagayan de Oro City, Misamis Oriental, said local governments would get 40 centavos for every P1 of tax collected by the National Government.

But the allocation, she said, would be based on tax collections in the past three years.

“Just this year, you have your share of the 2006 collections because we had a P100-billion increase in VAT, every year since 2006. This year for the first time, you are going to have your biggest increase in IRA of P40 billion,” she said, adding that VAT collections in 2006 reached P100 billion.

Mrs. Arroyo said her administration has paid for the IRA debts owed by previous administrations even when the VAT had yet to be implemented in 2005.

She said the vice mayor as the chief legislator of his town or city “holds great power in directing how the IRA will be used.”

She urged vice mayors to work with the National Government in cushioning the impact of the global economic crisis. – Paolo Romero