The Department of the Interior and Local Government (DILG) lauds the latest Supreme Court (SC) ruling that will give local government units (LGUs) an increased share from all national taxes and not just their allocation from national internal revenue taxes.
DILG OIC-Secretary Eduardo M. Año says that the SC's decision will spell a huge increase in Internal Revenue Allotment (IRA) of LGUs because they will also get their slice of the pie from the national tax collection of other agencies other than the Bureau of Internal Revenue.
"We are glad of the Supreme Court's ruling because this will lead to better financial standing of our LGUs. Sa pamamagitan nito, mas malawak at marami pang kababayan natin ang matutulungan at matutugunan ang mga pangangailangan," says Año.
In a landmark decision, the SC ruled that the ‘just share’ of LGUs under Section 6, Article X of the 1987 Constitution should be based on all national taxes and not only on national internal revenue taxes, as provided in Section 284 of the Local Government Code.
This means that LGUs will now get a share of customs tariffs and taxes collected by other state agencies such as the Bureau of Customs.
Internal revenue taxes, meanwhile, refer to taxes collected by the Bureau of Internal Revenue such as income taxes, estate and donor’s taxes, value-added tax, excise taxes and documentary stamp taxes.
The DILG Chief says that LGUs, as partners of the national government in peace and development, should use their additional IRA for projects, programs and activities (PPAs) that are aligned to national goals such as Build Build Build, anti-illegal drugs, anti-criminality and anti-corruption.
"The increase in IRA, which has already been evident since President Duterte's term plus the SC ruling, means better chances for the local governments to create positive change within their jurisdiction, especially in addressing illegal drugs and other social needs,” he adds.
According to DILG Assistant Secretary and Spokesperson Jonathan Malaya, LGUs should use a portion of their IRA for the conduct of barangay clearing operations, including rehabilitation and after-care of drug users in coordination with concerned agencies, establishment of Special Drug Education Centers, and strengthening of the criminal justice system, among others.
"When we are working on a common goal like eliminating the proliferation of illegal drugs in the country, the faster and the more efficient we can deliver our promises to the Filipino people," says Malaya.
He also lauds the SC decision in the light of proposals to shift to a federal system which will give more powers and resources to the regions. "This is a step in the right direction. Through this decision, our LGUs will have a taste of how more resources are distributed across all regions of the country," he says.
He says LGUs should also use a substantial portion of their IRA and other local resources to support the delivery of devolved basic services and facilities, development projects, local disaster risk reduction and management, among others.
He also reminds LGUs that their PPAs must have a result-oriented focus on the national development goals and must be in line with AMBISYON NATIN 2040, the 2030 Agenda for Sustainable Development, and the President's 10-Point Socio Economic Agenda as prescribed by Executive Order No. 27.
Section 305 of Republic Act 7160 or the Local Government Code provides that “local budget, plans and goals, shall as far as practicable be harmonized with national development plans, goals and strategies in order to optimize the utilization of resources and to avoid duplication in the use of fiscal and physical resources”.