IRA Base Basis Bawas na?

 "Specialfunds, special accounts and the COA share should not be deducted prior to thecomputation of the mandated LGUs’ 40% IRA share."

During the 25th Anniversary celebration of the 1991 Local Government Code, my mentor for 30 years, Joey Lina was invited by DILG as one of the resource persons, having been elected as Senator who co-authored RA 7160. Lina challenged us to seriously revisit how the IRA is being determined in accordance to DBCC Resolution 2003-02 that is still based on an inoperative law in 1973.

Atty. Lina concurs with the LPP-TWG findings that DBCC Resolution 2003-02 is ultra vires and that the special funds, special accounts and the COA share should not be deducted prior to the computation of the mandated LGUs’ 40% IRA share. This was the case during the Marcos regime. As a result of these deductions, the 20% IRA share was actually between 7-11% due to this provision in PD 144, as amended by PD 1741 when it had only 7 special accounts being deducted. Today, there are almost 29 special accounts listed.

In the original draft, the LGCode contained a similar provision in PDs 144 and 1741, to wit: “A maximum of twenty percent (20%) of national internal revenue taxes shall be available for national assistance to local government units: Provided, That the national revenue used as basis in computation shall EXCLUDE receipts accruing to Special or Fiduciary Funds and to Special Accounts in the General Fund, x x “ (underscoring supplied).

So, what was the original intent of the lawmakers then? Based on the Senate transcript on the deliberation on the IRA, former Sen. Guingona articulated that “one of the most important factors is really the base.” He said Guingona that the special accounts being deducted “may be one way of lessening the share of the local government units because special funds and special accounts can be declared as such by the DOF.”

Hence, RA 7160 does not contain any IRA impositions. Sec. 284 states that “Local government units shall have a share in the national internal revenue taxes based on the collection of the third fiscal year preceding the current fiscal year”. These special funds and LGU shares from national wealth were intended for the host LGUs “IN ADDITION TO THE IRA”. Art. 378 of AO 270, clearly states that the IRA “shall be determined on the basis of collections from national internal revenue taxes ACTUALLY REALIZED, as certified by the BIR.” (underscoring supplied)

(to be continued…)

 


Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TheLOBBYiST.
About the Author
Sandra Tablan Paredes is presently the Executive Director of the League of Provinces of the Philippines (LPP) since October, 2016 although she previously served LPP as Director from 1997 to 2004 Sandy helped organize ULAP in 1998 with former Governor Joey Lina and advocated for the LGUs' rightful IRA share, among other league advocacies, programs and projects to help local officials ensure local and fiscal autonomy and good governance. Recently served as concurrent interim Executive Director of ULAP from Jan-March 31, 2017. You can email her at This email address is being protected from spambots. You need JavaScript enabled to view it.
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