Solon: Increase fiscal autonomy for LGUs

December 12, 2021 Ryan Ponce Pacpaco 243 views

CAMARINES Sur Rep. LRay Villafuerte has called on senators to consider a measure that aims to further increase the fiscal autonomy of the local government units (LGUs), allow them to bankroll more development projects and rev up the delivery of frontline services in their respective localities.

Villafuerte told senators that, “Strengthening local autonomy by increasing the IRA prepares the way to achieving President Duterte’s vision of decentralization by federalism,” in citing the House-passed initiative to raise the IRA—now called National Tax Allotment (NTA)—of LGUs from the current 40% to 50%.

A former governor, Villafuerte said the measure will help LGUs become “more responsive and accountable” and will finally free them from the clutches of “Imperial Manila.”

He said that “raising the IRA due LGUs will complement the Supreme Court (SC) move to boost LGUs’ fiscal autonomy in ruling in 2018 in the Mandanas-Garcia case that the IRA should be computed on the basis of all national revenue collections and not just on the internal revenue take of the BIR (Bureau of Internal Revenue).”

The national government is expected to start implementing next year the Mandanas ruling in the allocation of the NTA—formerly the IRA—of LGUs.

Villafuerte issued the call after the House of Representatives passed on third and final reading House Bill (HB) No. 10296, the consolidated bill that seeks to increase to 50 percent from 40 percent the local government share in national taxes. Villafuerte as one of the principal authors of the consolidated measure.

“We call on the Senate to swift pass the measure from their end as a fitting Christmas gift to local executives,” Villafuerte, who served as Camarines Sur governor from 2004 to 2013, said.

Aside from increasing the share of LGUs in the proceeds from national taxes, the bill also ensures that this would not be reduced substantially even with a ballooning public deficit and lower gross domestic product (GDP) growth, because this contains a provision that states that in no instance shall the president be allowed to reduce the NTA to less than 30 percent of the collection of taxes on the third fiscal year preceding the current fiscal year.

Moreover, even with this reduced share, the measure also provides that during the first year of its effectivity, the LGUs, in addition to the 30 percent share, shall also include the cost of devolved functions for essential services.

Instead, the bill provides that in cases when the national government incurs an unmanageable public sector deficit, the President, upon the recommendation of the Secretaries of Finance, of Interior and Local Government and of Budget and Management, will make the necessary adjustments to the LGU share, but upon consultation with the Congress.

“As the Constitution itself declares, local autonomy means a more responsive and accountable local government structure instituted through a system of decentralization. The Constitution liberates the local governments from the imperialism of Manila. Autonomy, however, is not meant to end the relation of partnership and interdependence between the central administration and local government units, or otherwise, to usher in a regime of federalism,” Villafuerte said.

Villafuerte said the increasing the share of LGUs in the proceeds from national taxes will “truly empower and challenge the LGUs to use the additional allocation in providing better services, creating more development projects and implementing different programs to further the interests of their constituents.”

“Indeed, the autonomy and development of local governments is a most important aspect of regional and national development,” he said.