Governors seek immediate release of increased IRAs

Published July 20, 2019, 11:50 AM

by Francine Ciasico

By Rey Panaligan 

The League of Provinces of the Philippines (LPP) has asked President Duterte to immediately implement the Supreme Court (SC) decision which ruled that the internal revenue allotment (IRA) of local government units (LGUs) should be based on the collections of all national taxes.

LPP president and Marinduqe Gov. Presbitero J. Velasco Jr. said the 2018 SC decision, which became final and executory on April 10, 2019, also ordered the automatic release “without need of further action of the just shares of LGUs in the national taxes through their respective provincial, city, municipal or barangay treasurers on a quarterly basis but not beyond five days from end of each quarter.”

Velasco, a retired SC justice, said “it would be for everyone’s best interest if the national government will no longer delay the implementation by fiscal year 2022 as suggested by the government’s economic team.”

He said the issue on the IRAs has been discussed with Local Government Secretary Eduardo Ano in the recently held orientation by the Local Government Academy, and the consensus to appeal to the President was reached among the 61 governors who attended the LPP’s 1st General Assembly meeting last July 11.

With the consensus, Velasco said he sent a letter to the President, on behalf of the LPP, to appeal for the immediate implementation of the SC decision.

He explained that “the final decision of the SC has already denied all the grounds raised by the Office of the Solicitor General (OSG) in its motion for reconsideration, including its ‘suggestion’ to implement the same beginning FY 2022.”

He added that “with this jurisprudential declaration, the said SC decision instantaneously becomes part of the law of the land which cannot be deferred to a later time pursuant to Chapter I, Articles 7 and 8 of R.A. No. 386, or the New Civil Code.”

The government’s economic team had suggested to implement the SC decision in 2022 in view of its financial implications to the national coffers.

But Velasco, in his letter to the President, said the “LGUs need the additional resources now under your administration, more so with the implementation of the Universal Health Care as well as with your other priority programs.”

“As far as the provinces are concerned, we are four-square behind your administration, Mr. President,” added Velasco.

He stressed that the LPP members are open to discuss with the President and the government’s economic team the options for the automatic release of the IRAs.

At the same time, Velasco underscored the fact that the “LGUs have already graciously conceded to the non-payment of the P1.5 trillion IRA shortfalls covering the past 28 years.”

In its 2018 decision written by then Associate Justice Lucas P. Bersamin, now Chief Justice, the SC ordered the automatic release “without need of further action of the just shares of the LGUs in the national taxes through their respective provincial, city, municipal or barangay treasurers on a quarterly basis but not beyond five days from end of each quarter.”

The decision stated: “The 1987 Constitution is forthright and unequivocal in ordering that the just share of the LGUs in the national taxes shall be automatically released to them… Hence the just share of the LGUs in the national taxes shall be released to them without need of yearly appropriations.”

The decision included six more tax sources for the LGUs. These are the tariff and customs duties collected by the BOC, value-added taxes and all national taxes collected in the Autonomous Region in Muslim Mindanao, national taxes collected from mining, excise taxes collected from tobacco products, national taxes collected under Section 283 of National Internal Revenue Code and franchise taxes under Republic Act Nos. 6631 and 6632 (Horse Racing Laws).
This means that the LGUs would receive bigger IRAs from the national budget.

 
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