BAGUIO CITY – Concerned local officials questioned the national government on the implementation of the Mandanas-Garcia doctrine that will increase their Internal Revenue Allotment (IRA), now known as the National Tax Allocation (NATA), to provide additional sources of revenue to enhance the delivery of quality basic services and implement more high impact development projects.
Instead of an increase in their NATA in time for the preparation of their budget next year, most local officials claimed their NATA is being reduced primarily because of the effect of the implementation of the COVID-19 lockdowns to contain the rapid spread of the deadly virus.
Some local chief executives, who requested anonymity this time for various reasons, claimed there should be no reduction on their NATA for next year because the basis of the computation might have been wrong and they are requesting budget officers to review the bases of the NATA of local governments for next year.
Under existing laws, rules and regulations, the IRA which is now NATA of local governments is computed based on the revenue generated by the national government 3 years preceding the fiscal year that is why the NATA for next year will be based on the revenue collection of 2020 or during the height of the COVID-19 pandemic.
The concerned local chief executives argued that the NATA of local governments should not decrease for next year if the basis of the revenue will be the collections of 2020 because the same is derived from the income of businesses in 2019.
According to them, the supposed 27-to-37 percent increase in the NATA of local governments is now turning instead to be a 15-to-20 percent reduction on their NATA which negates the projected increase in their NATA under the Mandanas-Garcia doctrine.
If the computation of their NATA is based on the government’s revenue 3 years preceding the fiscal year, the concerned mayors pointed out that the government’s decreased revenue can only be reflected in the year 2020 which understandably will yield decreased taxes paid to the national coffers in 2021, thus, the NATA reduction can only be applied to next year in time for the preparation of the 2024 budget of the local governments.
They predicted that with the NATA reduction for this year, it might be worse for next year which will impact on their 2024 annual budget primarily because revenues of businesses in 2020 were really down thus expectedly, taxes paid to the government in 2021 will also be reduced.
Local officials expressed hope that finance and budget officials will be able to clarify the matter with them because the significant reduction on their NATA for the next several years will really hurt the local governments, especially the ones relying on the NATA to sustain their operations.