A Performance-Based 'Internal Revenue Allotment System'; (Part I)

Article excerpt

Byline: Francis N. Tolentino

THE current debate on whether the Internal Revenue Allotment (IRA) share of local government units from R141 billion to R121 billion, judging from the reaction of local officials and the enormous negative effects on our people, should be laid to rest. Local autonomy is always the winner. Unless the National Government declares an unmanageable public sector deficit, the automatic release of the IRA will stay, as provided for under Article X, Section 6 of the 1987 Constitution: Local Government Units shall have a just share, as determined by law, in the national taxes which shall be automatically released to them.

Two Supreme Court decisions in Pimentel vs. Aguirree (G.R. 132988) and Batangas vs. Romulo (G.R. 152774) struck down attempts by the National Government to infringe the constitutional right of LGUs to receive their internal revenue share. In the recent Batangas vs. Romulo case, the Supreme Court emphasized that the automatic release of the IRA was precisely intended to guarantee and promote local autonomy.

The current IRA share of all local government units is R141 billion, which is 17 percent of the National Budget as against the R231 billion (approximately 28 percent of the National Budget) which is being spent for interest payments to debt service and the R440 billion (55 percent of the National Budget) being used by the National Government, would reveal a small piece of the pie for LGUs who are the frontliners when it comes to delivery of basic services.

Indeed, the IRA, which the LGUs receive as a matter of constitutional right is an effective mechanism in showing the human face of the State in the countryside in terms of providing basic health care, agricultural support systems, infrastructure development, housing and public safety services, among others. …