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SC ruling on IRA to cost the government P1.5 T – DOF
MANILA, Philippines – The Supreme Court's decision that includes all national taxes in the Internal Revenue Allocation (IRA) of Local Government Units (LGU) may cost the national government up to 1.5 trillion of P1 if applied retroactively, according to the Department of Finance (DOF)
In an interview, Finance Secretary Carlos Dominguez said the amount owed by the national government to the LGUs could reach 1 500 billion pounds sterling if the SC decides to apply its decision retroactively from the Local Government Code. was implemented in 1992.
"Our calculation is between $ 1 trillion and $ 1.5 trillion, that's only speculation, between $ 1 trillion and $ 1.5 trillion of debt if it is retroactive, "said Dominguez.
Because of the huge amount, the chief financial officer said that the government might not be able to pay "
" We do not know the decision, but we certainly can not afford a single payment. However, if the SC's decision is implemented prospectively, Dominguez said that the national government could delegate some of its programs and projects, and give the LGU funds for these initiatives as IRAs. 19659004] "If possible, it's just that we sit down with the LGUs and take care of them." The CFO said such projects could include farm-to-market roads currently being implemented by the Ministry of Agriculture, or some projects of reform and agrarian infrastructure, 19659004] Dominguez also stated that LGUs can also support the collection of certain taxes in the prospective scenario.
" They might want to be the only one to take care of the taxes we collect, who knows? Maybe they want to collect the kind of tax they want to collect, maybe they want to be the ones who collect it, "he said.
Earlier, the CS ruled that the IRA's LGUs should include all national taxes, not just taxes on internal revenues.However, the SC has not yet released a copy of the decision.
Internal income taxes refer to taxes collected only by the Bureau of the Internal Revenue (BIR), while national taxes include taxes collected by the BIR, as well as taxes collected by the Customs and Excise Bureau. other government agencies.
According to Budget Minister Benjamin Diokno, the decision could potentially have a negative impact on the country's fiscal situation, with the budget deficit reaching six per cent of gross domestic product, double the current deficit ceiling. three percent.
Diokno warned that this could also lead to downgrades and a decline in the confidence of the international community. He said it could also significantly reduce government funding for its massive infrastructure program.
Due to his detriment to the country's fiscal position, Diokno said earlier that DBM has sought the help of the Solicitor General's office. .
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