TRANSITION COST TO NEW GOVERNMENT ‘P2.2 TRILLION’
The amount will be used to spend for the changes that are dictated by the drafted constitution if it’s approved in its current form Once it becomes a federal region, Central Visayas, which will be composed of Cebu and Bohol, will get an additional P30.6 billion
The national government is ready to allocate more than P2 trillion in preparation for the transition to a federal form of government.
Some members of the Consultative Committee (ConCom) tasked by President Rodrigo Duterte to amend the 1987 Constitution made the announcement during one of their regional information drives held in Cebu City last Friday.
Wendell Adrian Tamayo, head of the ConCom’s technical working group, said that the national government has set aside P2.2 trillion that will be used to spend for the changes that are dictated by the draft federal constitution, if it is approved in its current form by Congress and ratified by the people.
Purpose
The allocation will be spent for the creation of the new 16 federated regions and two autonomous regions; four federal courts and six constitutional commissions. The four new courts to be created under the proposed federal system of government will include a federal Supreme Court, federal Constitutional Court, federal Administrative Court and federal Electoral Court.
The proposed federal system of government will also include constitutional commissions such as the Civil Service Commission, Commission on Elections, Commission on Audit, Commission on Human Rights, Ombudsman Commission and the newly-created Competition Commission, which will be tasked to promote competitiveness in business and investments.
Tamayo said that once it becomes a federal region, Central Visayas, which will be composed of the provinces of Cebu and Bohol, will receive an additional P30.6 billion, on top of its current annual Internal Revenue Allotment (IRA) of P29.7 billion.
Sharing scheme
In the draft federal constitution, each federal region will receive 50 percent share of the revenue from the Bureau of Internal Revenue (BIR) coming from collections from income tax, value-added tax, excise tax and duties and tariffs collected by the Bureau of Customs. At present, local governments divide 40 percent of the internal revenue, the rest of which goes to the national government despite the transfer of several responsibilities or mandates to local governments since 1992.
Aside from the share of revenue from the federal government, the draft federal constitution also gives power to federated regions to receive revenues from estate taxes, documentary taxes and other taxes that are currently collected from the national government, Tamayo said.
But Tamayo admitted that one of the challenges that the proposed shift to federalism could face is how balance could be achieved in the taxes controlled by the regional government and those due the federal government. Avoiding double taxation is a familiar refrain whenever the shift to a federal government is discussed, and some economists have called for a clear and precise assignment of expenditures and revenue sources.