Senate committee eyes non-tax collections to boost IRA share of LGUs

DAVAO CITY (MindaNews/19 June) — Senator Ferdinand Marcos Jr. has assured local officials that part of the review of the Local Government  Code that his committee is doing would be to find other sources to increase the fund for internal revenue allocations (IRA).

Marcos told the 2nd Board Meeting of the Philippine Councilors’ League Friday night that the Committee on Local Governments which he chairs  has eyed as possible source the non-tax collections of government agencies.

“These are collections by the Bureau of Customs, for example, which are not in the form of tax,” he said. He added there are other similar  collections by other regulating agencies in government from where “we can get our additional funds for the local governments.”

Marcos said his committee would seek a cut of 30 percent of these collections as what has been practiced also in computing the share of the IRA. “The IRA is based on the 30 percent of the total tax collections of government.”

“But the situation has now changed dramatically: more local government units have been formed, more LGUs have become cities, and so the IRA has also become smaller as more units have to share the fund,” he said.

Last year alone, 16 more towns, many of them the capital of provinces, were upgraded to cityhood status.

An increase in the IRA would also mean pulling out some of the pressures in the budgeting process among local planners “because we all know that a big percentage of the IRA usually go to personnel services (PS),” Marcos said.

“We know that at least 53 percent, many LGUs in fact, have higher percentage, go to PS,” he said. “This would make it harder for local governments to set aside some amount for infrastructure and other development projects,” he said.

Alma Moreno-Salic, wife of Marawi City Mayor Sultan Fahad “Pre” Salic, and the national president of the PCL, told reporters that the  organization would cooperate with Marcos’ committee in finding more possible sources to increase the IRA fund.

Executive Secretary Paquito Ochoa, who also addressed the PCL board meeting attended by 1,500 presidents and other officers of municipal and provincial leagues of councilors, urged them to come up with ordinances to encourage better incentives to business.

“We have to find ways to make it easier to do business in our localities,” he said, as he cited Quezon City, where he once served as its administrator, for implementing a system “that would fast track the processing of business permits and would encourage taxpayers to settle local taxes because the two things every local government needs are money and business.”

“Funds are important. You have to generate tem and you have to manage them properly; master both and you will be able to do what we did in QC: turn around what was once a city in debt into a city with a billion-plus surplus,” he said. (MindaNews)