Recto to Palace: Dont impound IRA
2008-10 share of LGUs from natl taxes to reach P756 B

Local government share from national taxes collected officially known as Internal Revenue Allotment would amount to P756 billion from 2008 to 2010, allowing local governments to improve services and finance development, Sen. Ralph Recto said today.

By Rectos computation, the IRA of local governments would jump from this years P183.9 billion to P208.3 billion in 2008, to P251.4 billion in 2009, and to P296.4 billion in 2010.

As IRA funds rise simultaneous with the increase in tax collection , Recto called for faithful compliance with the constitutional provision that these shares be automatically appropriated .

The IRA must be insulated from politics. It is an entitlement of LGUs which must be released in full and on time. The IRA should not be used as a bait to toe a particular political line, he said.

Recto added : It must be released regardless of the political affiliation of the head of an LGU. Because essentially, this is a towns rebate from taxes its residents have contributed to the national coffers. The national government is just a temporary custodian of these funds.

The IRA for a particular year represents 40 percent of internal revenue collected by the Bureau of Internal Revenue three years before . In the case of the IRA for 2007, the base year used in computing it is the 2004 collections.

The total IRA pie is further subdivided as follows: 23 percent to provinces; 23 percent to cities; 34 percent to towns and 20 percent to barangays.

The share of an LGU is determined in turn by its population and land area, and what the Local Government Code of 1991 states as the equal sharing principle.

At present, 82 provinces, 118 cities, 1,507 towns, and 41,885 barangays share the yearly IRA allocation.

But the IRA is just one of the allocations for local governments, Recto said. In the national budget, LGU allocations are bundled together in a section called allocation to local government units, or ALGU.

This year total ALGU is about P198 billion, Recto explained. Included in this fund is the P3.5 billion in premium subsidy for indigent families under the PhilHealth program.