Bigger internal revenue allotments (IRA) for local government units are part of the provisions a House panel is considering in its revised version of proposed amendments to the Constitution.
Rep. Rufus Rodriguez, chairman of the House Committee on Constitutional Amendments, said the panel had deferred a committee report, which was supposed to be scheduled for deliberation at the plenary level, to hear the proposed amendments from the administration’s Inter-Agency Task Force (IATF) on Federalism and Constitutional Reforms that had not been included in the original committee report. A resolution was earlier approved in an executive session in December 2019.
The IATF was created by President Rodrigo Duterte to come up with the administration’s recommendations for Charter change. It is composed of nine agencies and headed by Local Government Secretary Eduardo Año as chairman and Justice Secretary Menardo Guevarra as vice chairman.
Rodriguez said he and several committee members supported the inclusion of the IATF’s proposed provision of a larger IRA for provinces, cities, towns and villages throughout the country.
“Local government units (LGUs) are entitled to it. That is what the Supreme Court has declared in the Mandanas case,” the Cagayan de Oro Second District representative added, referring to a petition filed by Batangas Gov. Hermilando Mandanas.
Rodriguez said based on the study conducted by the Department of the Interior and Local Government (DILG), LGUs would have a total of P1.116 trillion in IRA in 2022 with the Supreme Court ruling, or P313 billion more than if their allocations were computed without the high court’s decision.
In the 2020 national budget, the IRA for LGUs is P649 billion.
Rodriguez said currently, the IRA, which represents the LGUs’ share of national taxes, is computed based on “internal revenue taxes” or those collected by the Bureau of Internal Revenue (BIR). They do not include collections by the Bureau of Customs.
Meanwhile, the Mandanas ruling expanded the base to include not only taxes collected by the BIR, but also those that are collected from the Bureau of Customs and other impositions, including half of value-added tax (VAT) from the autonomous Muslim region, which is 60 percent of levies from the exploitation of natural wealth, and half of VAT on the sale of goods and properties, Rodriguez said.
Based on the DILG study, Rodriguez claimed that the expanded IRA ruling would give provinces an additional P268 billion; while cities, towns and villages would gain P268 billion, P397 billion and P233 billion, respectively.
He noted that Camarines Sur would increase its IRA by P1.140 billion to P4.85 billion. Makati’s share, meanwhile, would increase by P556 million to P2.364 billion. The town of Taytay in Rizal would also have a P263-million increase from P856 million to P1.119 billion.
Other proposals from the IATF are provisions against political dynasties and turncoatism, election of senators by region, five-year term for members of the House of Representatives and local officials, lifting of limitations on foreign investments, and state subsidy for political parties.
Rodriguez said the committee and ex-officio members would meet on February 19 to votes on each proposed provision or amendment. The committee will then submit a report to the committee on rules.
He added that the House would then convene into a constitutional assembly to vote on the constitutional amendments. He said a three-fourths vote is needed to pass the amendments.