SC hikes LGUs’ share in national taxes

MANILA, Philippines — Provinces, cities, towns and barangays will receive more funds following a Supreme Court (SC) ruling increasing their share in the national taxes, former Manila mayor and Rep. Lito Atienza of party-list group Buhay said yesterday. 

Another congressman, Luis Raymund Villarfuerte of Camarines Sur, said the ruling would boost the financial autonomy of the local government units (LGUs).

The court decision “is a long-delayed interpretation of the constitutional guarantee that local government units shall have a just share, as determined by law, of the national taxes, which shall be automatically released to them,” Atienza said.

He said the LGUs should now receive more than 40 percent in revenues that the national government used to allocate to them.

He hoped the additional funds would be properly used.

Villafuerte, a former governor of his province, urged the Department of Budget and Management (DBM) to work out right away a viable plan on the prompt release of unremitted internal revenue allotments (IRA) of the LGUs since 1992, estimated at P800 billion for the 2010-2016 period alone. 

The IRA represents LGUs’ share in national taxes.

Budget Secretary Benjamin Diokno is not amenable to  the SC ruling, saying it will jeopardize the government’s financial position.

Villafuerte hoped the DBM would follow the tribunal’s decision, noting that President Duterte himself is a former LGU executive who is aware of the importance of the IRA releases in financially empowering the LGUs.

“A much higher IRA share would certainly boost the fiscal autonomy of the LGUs ahead of the imminent switch from the presidential to the federal system,” Villafuerte said.

He said one key ingredient for the success of the federal shift is the greater fiscal autonomy of the LGUs that would enable them to fund their own projects and spur local economic growth.

The DBM should not only release the increased IRA allotments for this year and 2019, but should as well schedule the payment of the  IRA from 1992 as mandated in the ruling, he added.

The SC included all national taxes including customs tariffs and duties in the definition of national revenues.