Provinces, cities, towns, and barangay communities stand to have P313 billion more in internal revenue allotments (IRA) with Charter change (Cha-cha), Cagayan de Oro City Rep. Rufus Rodriguez said on Tuesday.
The chair of the House committee on constitutional amendments said the IRA gain is a result of the recent Supreme Court ruling expanding the base for computing such allocations.
He said based on a study done by the Department of Interior and Local Government (DILG), local government units (LGUs) would have a total of P1.116 trillion in IRA in 2022 with the SC ruling.
They would be allocated only P855 billion if IRA were computed based on the present formula, he added.
For this year, P649 billion is appropriated in the national budget as the LGUs’ IRA, which represents the share of local governments from national taxes.
The DILG heads the Inter-Agency Task Force on Constitutional Reform, which President Duterte has created to push for the administration’s Cha-cha proposals. The group is composed of nine agencies.
The task force has submitted its recommendations to the Rodriguez committee, which is holding another public hearing on the group’s proposals tomorrow (Wednesday).
Among its suggestions is the inclusion of the essence of the SC ruling on expanded IRA in the Constitution.
At present, IRA is computed based on “internal revenue taxes,” or those collected by the Bureau of Internal Revenue. They do not include collections by the Bureau of Customs.
The SC ruling expanded the base to include not only taxes collected by the BIR but Customs as well, and other impositions, including half of value added tax (VAT) from the autonomous Muslim region, 60 percent of levies from the exploitation of natural wealth, and half of VAT on the sale of goods and properties.
Citing the DILG study, Rodriguez said the expanded IRA ruling would give provinces an additional P268 billion, while cities, towns and barangays would gain P268 billion, P397 billion and P233 billion, respectively.
He said in the case of Camarines Sur, its IRA would increase by P1.140 billion to P4.85 billion, while Makati’s share would jump by P556 million to P2.364 billion.
The town of Taytay in Rizal would have P263 million more, from P856 million to P1.119 billion, he said.
The Department of Finance has opposed the immediate implementation of the SC ruling because of its negative impact on the country’s finances.