The IRA decision does not need to widen the deficit, says the petitioner

THE GOVERNMENT May No need to widen its budget deficit to comply with a Supreme Court decision to provide local governments their "fair share" of revenue from the national government, the former governor who obtained the court ruling.

Hermilando I. Mandanas, a former Batangas governor and representative of the district ^{of the province} who also chairs the Regional Development Committee of Luzon, added that the committee on Thursday signed a resolution urging the Department of Finance and the Department of Budget and Management at

He said that the decision should be applied retroactively, with full liability to the LGU Internal Revenue Allowances (IRAs) worth about 1 .500 billion Pillars from 1992 – the year the local government code was adopted – to 201 8.

The law stipulates that local authorities are entitled to a 40% share of "national taxes on internal income on the basis of the recovery of the third fiscal year preceding the current fiscal year. "

For 2019, the share of the local government, known as the Internal Revenue Allotment (IRA) is officially estimated at 575.5 billion pesos, but according to the interpretation of the settlement should include 200 billion more.

The High Court, sitting in a bench, said on July 3 in a 10-3 statement in favor of the inclusion of all national taxes in the calculation of IRAs such as those collected by the Customs Bureau and the Treasury Office. He has not yet published his final resolution.

Budget and Management Minister Benjamin E. Diokno said the government will likely file a petition for review with the Solicitor General's Office because of the risk of credit rating downgrades. because the fiscal situation would become "unmanageable", the budget deficit increasing to 6% of gross domestic product, double the expected 3%

. Mandanas said at a briefing in Mandaluyong City: "I ask DBM to recalculate because of the decision of the SC as this would definitely affect the budget.But the deficit of 6% – this is not not true. "

Mandanas said the additional IRA should be levied on current allocations for national agencies, and at the same time leaving the functions of these agencies to local government units (LGUs) such as transfers conditional money, fertilizer funds and roads the Department of Agriculture and Medical Services Department of Health, among others.

"Just transfer the funds, take it out of the national agencies, the funds that are really for the basic services that should be done locally, give it to the local government," Mr. Mandanas said.

"This would increase the amount of money so that they can perform their mandated basic services .. We do not need to borrow money. added that unallocated shares from previous years could be paid in installments for a period of up to 20 years, but added that the method of payment still depends on the final decision of the SC 19659003] "My suggestion is that you can not pay once. So the retroactive payment will be paid in maybe five, 10 or 20 years. This can be the subject of negotiations. "

Mandanas said that providing more funds to LGUs will be" more transparent "and" more efficient "as the LGUs themselves know their needs better than the national government.

" Our credit rating will even increase because that we will be able to spend our money more efficiently. We would be able to spend more, infrastructure projects can even be built faster. The Barangays will build the roads they need. It will not hurt the national government. "

Mercedita A. Sombilla, deputy secretary of the National Authority for Economic and Development, said the proposal was" rational ", adding that" their demands are valid … a direction positive, which is really good for regions and LGUs. "

Many LGUs depend on the income of the national government which has delayed the development of their ability to raise their own funds through property and commercial taxes, among others

Mr. Mandanas replied by saying:" The principle of Basis is that you would only transfer the funds that they are able to spend. Like fertilizers. Soil conditions are different in cities and municipalities.

Finance Secretary Carlos G. Dominguez III said that the government would wait for the official publication of the decision before taking any action

"We have not yet received the decision of the CS and we will comment after having had the opportunity to study it closely and evaluate its implications, "Dominguez told reporters yesterday in a phone message. – Elijah Joseph C. Tubayan