After SC ruling on IRA, Mandanas calls for recast of 2019 budget

Tina Ganzon-Ozaeta
After SC ruling on IRA, Mandanas calls for recast of 2019 budget
The Supreme Court has ruled that the 'just share' of local government units must be computed and sourced from all national taxes and not just from the national internal revenue taxes

BATANGAS, Philippines – Batangas Governor Hermilando Mandanas urged the national government to recast the 2019 national budget that Malacañang endorsed to Congress to implement the recent Supreme Court ruling on the computation of the Internal Revenue Allotment (IRA) for local government units (LGUs).  

As lead petitioner in the case and chairman of all Regional Development Councils in Luzon, Mandanas on Wednesday, July 11, proposed the passage of a resolution requesting the Department of Budget and Management (DBM) to urgently implement the SC decision.

The Supreme Court announced on July 4 its decision that the “just share” of LGUs must be computed and sourced from all national taxes and not just from the national internal revenue taxes. 

“Implementing the ruling of the Supreme Court will enable the LGUs to efficiently and expediently serve the Filipino people and hasten the delivery of much needed and long delayed basic services,” Mandanas said.

With this, the 2019 proposed budget of P640.6 billion allotment to LGUs will increase by about 50% due to the inclusion of the Bureau of Customs collection of national taxes, including tariffs and custom duties.  

“This is the real meaning of bottom-up budgeting and inclusive development. With increased funds, the real needs of the community will be attended by the community. Shifting money from the national government to the local government will mean devolved services can now be really funded, and this will also reduce underspending and corruption,” Mandanas added.

Among the basic services and facilities that the LGUs can now provide without being at the mercy of the national government are repairs of barangay roads, building of health centers and hospitals, provision of CCTVs for crime prevention, tourism facilities, and their own ambulances.  

Aside from the estimated P300 billion increase in the 2019 budget, LGUs have yet to receive P1.5 trillion representing IRA backpay from 1992, he said. 

Mandanas recognized that the national government will not be able to pay this amount in full unless they borrow, but said “that (borrowing) need not be done if they recast the existing budget. If they take out the amount from the general budget and give it as IRA, there will be no increase in the total budget and no borrowing involved,” 

In 2012, Mandanas, who was representative of the 2nd district of Batangas, went to the High Court to question the government’s wrong computation and misappropriation of IRA funds for LGUs.  

In his 23-page petition, Mandanas argued that Section 284 on Allotment of Internal Revenue Taxes of Republic Act 7160 (Local Government Code) clearly defines “just share” regarding the IRA while Section 21 of RA 8424 (National Internal Revenue Code) enumerates the sources of revenue as income taxes, estate and donor’s taxes, value-added tax, other percentage taxes, excise taxes, documentary stamp taxes, and such other taxes imposed and collected by the Bureau of Internal Revenue.

During the time of President Gloria Macapagal-Arroyo, Mandanas had won a petition and was able to have some P60 billion in IRA to local governments released. – 


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