Republic Act (RA) 7160 or the Local Government Code allows local government units, particularly provinces, cities, municipalities and barangays, to have a 40-percent share from all taxes as their Internal Revenue Allotment (IRA) that is part of their sources of income for their budgetary requirements. The IRA of local governments comes from all the classified national taxes collected by the national government, while local governments are also empowered to enact revenue measures to generate added funds for the implementation of priority development projects and enhance the delivery of basic services to their constituents.
However, since the implementation of the Local Government Code over two decades ago, the national government had been short-changing the local governments units (LGUs) because it only based its computations of the 40-percent share of these political subdivisions only on taxes being collected by the Bureau of Internal Revenue (BIR)) and not from all revenue-collecting offices. This results to shortfalls in tax collections thereby rendering the share of local governments incomplete year on year.
Taxes are the lifeblood of government, it being the primary source of resources to fund the operations of the bureaucracy, key programs and projects, and services necessary in improving the state of a province, city, municipality or barangay. Thus, the BIR and other revenue-collecting agencies must be steadfast in collecting taxes due to the government to be plowed back to the people through the implementation of projects in communities and the delivery of basic services, especially health, education and other social services and the need is more urgent in the remote communities.
Local governments realised they had been short-changed the computation of their annual IRAA. Through the Union of Local Authorities of the Philippines (ULAP), an organization of all officials of provinces, cities and municipalities, and other leagues of local chief executives, LGUs are questioning the sincerity of the national government in complying with its mandatory obligations prescribed under the pertinent provisions of existing laws, rules and regulations, especially in computing the respective correct IRA annually.
The group emerged victorious as the Supreme Court (SC) rendered a decision last year that defined the scope of national taxes as including all the taxes being collected not only by the BIR, but also the Bureau of Customs (BOC) and other revenue collecting agencies, in the computation of the annual IRA of local governments. Instead of deferring to the SC ruling, the national government, through the budget department, appealed the decision by filing a motion for reconsideration that seeks to delay the implementation of the new sharing scheme. This means delay in the release of added income to the local governments and more funds for priority projects and enhanced delivery of services to each respective LGU constituent. Based on the data obtained from the Constitutional Commission created by President Rodrigo Duterte to review the possible amendments to the 1987 Constitution and draft the proposed federal charter, the government had only been releasing to the local governments some 16 to 19 percent of the supposed 40 percent annual IRA. This illustrates that local government, through the years, had been seriously short-changed in the distribution of their share from the resources of the government.
We support the clamor of local officials for the immediate release of the more than P1.5 trillion debt of the national government to the provinces, cities, municipalities and barangays as the under remittance of their IRA for over two decades now or since the implementation of the Local Government Code. This obvious lapse, if it may be called that, is a deep injustice to the spirit of the Local Government Code. It behooves the budget department to rectify this immediately instead of blocking attempts for the rectification of such an injustice. The DBM is an arm of the government that looks at the equitable distribution of government resources at all levels for national development and not to arrogate as much resources to the national government. The motion for reconsideration filed by the DBM questioning the SC ruling that clearly defined the scope of national taxes simply adds insult to injury. Local governments already agreed to the proposal of the country’s finance officers that the over P1.5 trillion accumulated debt of the national government for the under remittance of the IRA will be equitably distributed over a period of time but the budget department instead ignored the agreement and this caught the ire of local officials nationwide.
The question that continues to linger in the minds of ordinary citizens is why does the national government continue to deprive the local governments with added resources to achieve comprehensive national development goals especially now that the government has commitments to the achievement of the 17 Sustainable Development Goals by 2030?
The least the national government can do is to give what is legally due to local governments as local officials know best their backyard This is one of the reasons why the Cordillera should be granted autonomous status at the end of the day.
