LGUs demand return of P500B in IRA unremitted since 1992

CITY OF SAN FERNANDO—A campaign to recover a shortfall of more than P500 billion in internal revenue allotments (IRA) for local governments is gaining ground, one of the proponents said.

Bataan Gov. Enrique Garcia said the matter has been discussed with officials of the Union of Local Authorities of the Philippines as well as with leagues of municipalities, cities, barangays and other organizations of local officials, to press for the inclusion of the shortfall in the 2012 national budget.

The IRA represents local government shares from all taxes collected by various national taxing agencies in a year.

“Local officials want the amount to fund development projects in their respective areas. We are expecting them to be issuing resolutions asking President Aquino and Congress to release the IRA shortfall,” Garcia told the Inquirer on Thursday.

He said the shortfall amount representing the IRA from 1992 to 2011 is 174 percent more than the total amount of IRA in 2011.

The Constitution grants local governments a 40-percent share from national taxes. The allotments are given to provinces and cities (each is entitled to 23 percent), towns (34 percent) and barangays (20 percent).

The Local Government Code of 1991 (Republic Act No. 7160) set the shares based on population (50 percent), land area (25 percent) and equal sharing (25 percent).

Garcia traced the shortfall to the deductions made from gross internal revenue collections, which were not provided by law.

The shortfall has also been traced to the Bureau of Customs (BOC), which has not added excise taxes and value-added taxes on imported goods to the gross internal revenue collections, he said.

He said the BOC computations provide the bases for the 40 percent of the IRA which is automatically allocated by Congress, and disbursed by the Department of Budget and Management.

By 2012, the national government should “compute correctly the 40 percent IRA which is automatically appropriated,” he said.

Garcia said the shortfall can fund the development of the countryside.

But if government ignores their plea, the shortfall can put a wedge between local officials and Malacañang, he said.

Garcia claimed that the economic managers of the President are advising against recognizing and disbursing the shortfall. He said he brought up the issue with former President Gloria Macapagal-Arroyo in 2008. “She did not act on it,” the governor said. Tonette Orejas, Inquirer Central Luzon