Increased IRA of LGUs in 2022

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BAGUIO CITY  – The City Budget office disclosed the budget department will increase in the Internal Revenue Allotment (IRA) of local governments in compliance to the decision of the Supreme Court (SC) that expanded the coverage of national revenue by 2022.

City Budget Officer Leticia O. Clemente informed city officials the decision to implement the SC ruling by 2022 was conveyed to the different budget officers by officials of the budget department during a recent gathering of the government’s finance officials to review the same and craft the implementing guidelines of the ruling increasing the IRA of the different local governments.

She said, however, the national government will be re-devolving additional duties and functions to the local government in exchange for the expected increase in their IRA as an offshoot of the SC ruling.

Earlier, the SC ruled that the national revenue collected by the national government includes all revenues collected by the different revenue collecting agencies of the government, such as the Bureau of Internal Revenue (BIR), Bureau of Customs (BOC), among others, from which local governments are entitled to be allocated their due share.

Previously, the budget department only computed the IRA of local governments based on the revenues that were collected by the BIR excluding other revenues generated by other revenue collecting agencies that prompted the Union of Local Authorities of the Philippines (ULAP) to file a petition before the SC that questioned the exclusion of other revenues in the computation of the IRA of local governments.

Under the provisions of Republic Act (RA) 7160 or the Local Government code of the Philippines, local governments are entitled to have a share from the national revenue that are generated by revenue collecting agencies that the same could utilize for the implementation of their priority development projects, personnel services and maintenance and other operating expenses.

Clemente explained the increased IRA of local governments based on the recomputation to be done with the inclusion of all revenues collected by the national government will entail  increased responsibility of the local governments considering the expected devolution of additional government services and personnel to them aside from the earlier devolved functions on social welfare and health.

Part of the annual budgets of local governments over the past two and a half decades is their IRA from the national government  which is released on a periodic basis based on the revenue collection of the BIR.

The primary components of the annual budgets of local governments include personal services, maintenance and other operating expenses, capital outlay, local development funds and disaster risk reduction and management fund that will be sourced from the beginning balance, external and internal sources of income.

By Dexter A. See

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