LGUs receive nearly 100% of IRAs

THE BUDGET department said it has released nearly 100% of local government units’ (LGUs) share of taxes collected by the national government as of mid-April.

According to the Department of Budget and Management ( DBM), LGUs received Internal Revenue Allotments (IRAs) of P522.75 billion, up 7.37% year on year.

“As of April 16, 2018, the Department of Budget and Management has released 99.99% of the FY (Fiscal Year) 2018 IRA,” the DBM said in a report released on Friday.

IRAs are the 40% LGU share of national government taxes collected three years prior, as mandated by Republic Act No, 7160, or the Local Government Code of 1991.

About 43,607 LGUs received IRAs. Some P121.59 billion went to 82 provinces, P119.77 billion to 145 cities, P178.13 billion to 1,748 municipalities, and P103.25 billion to 41,902 barangays.

Each LGU’s share is determined partly by its population and land area.

“An increased IRA means an increase in the local government unit’s capacity to provide social services and local infrastructure projects for their communities,” the report read.

LGus are required to prioritize the use of IRAs for “basic services and facilities,” particularly those devolved by the Health, Social Welfare and Development, Agriculture, and Environment departments, as well as other agencies of the national government.

They are also required to appropriate in their annual budgets at least 20% of their IRA for “development projects,” as outlined in DBM’s Joint Memorandum Circular 2017-1.

On top of the IRAs, LGUs are also entitled to a total of P23.11 billion in proceeds of national taxes as mandated by various laws.

LGUs received P12.89 billion from the excise tax on Virginia tobacco, and P2.93 billion from burley and native tobacco.

“As of April 30, 2018, the DBM has released P9.33 billion out of P17.07 billion (FY 2017, General Appropriations), and P10.07 billion of P13.17 billion (FY 2016, Continuing Appropriations) shares of Local Government Units in Tobacco Excise Tax,” the DBM said.

The funds are authorized for use in “advancing the self-reliance of the tobacco farmers” through cooperatives, livelihood programs, agro-industrial, and infrastructure projects, as well as training programs and financial support to displaced tobacco farmers.

LGUs are also expected to receive P3.98 billion from mining royalties, P24.19 million in business taxes within economic zones, P3.29 billion in incremental collections from value- added tax ( VAT), and P2.19 million in VAT in lieu of franchise taxes. —