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‘LGUs can hike income sans federal setup’

A regional federal setup may not be needed to allow local government units to increase their income, Senate Majority Leader Juan Miguel Zubiri said Thursday.

He cited the Supreme Court decision that resolved a petition filed by Batangas Gov. Hermilando Mandanas for the automatic release of the internal revenue allotment of LGUs.

“This will add a huge amount to the IRA of cities, municipalities and provinces,” Zubiri told Dobol B sa News TV. 

“In a way, that’s additional fiscal autonomy for the LGUs. The regional federal setup may not be needed.” 

Zubiri made his statement even as a pro-administration lawmaker on Thursday appealed to both chambers of Congress to give priority to the passage of a measure increasing the share of local government units of the Internal Revenue Allotment following a landmark Supreme Court ruling enlarging their IRA share and in support of the imminent switch to the federal form of government. 

Camarines Sur Rep. Luis Raymund Villafuerte said the approval of House Bill 4697, which aims to increase the IRA of LGUs from 40 to 60 percent over a three-year period, would allay the concerns over the financial capability of most local governments to survive under the federal setup. 

“This precedent-setting ruling of the high court, which partially addresses our proposal under House Bill 4597, would  truly strengthen the fiscal autonomy of LGUs if the bill’s provision on increasing the IRA of LGUs from 40 to 60 percent is also approved by the Congress,” said Villafuerte,vice chairman of the House committees on local government and on appropriations.  

Zubiri has been a proponent of federalism but is opposed to the regional federal setup. He has expressed doubt that federal states could generate the P30 billion to P40 billion average annual IRA of each region.

He said Senate Minority Leader Franklin Drilon had a point in saying that the Bangsamoro Basic Law-now the Bangsamoro Organic Law after it was approved by the bicameral committee on Tuesday―was proof that the supposed benefits of federalism could be achieved without Charter change.

“Tingnan natin. Dito sa dagdag pondo para sa mga probinsya, siyudad, at munisipyo, mabibigay na nila yung basic services nitong developmental programs sa iba’t-ibang lugar, baka ‘di nga kailangan ng additional devolution,” Zubiri said.

An amendment to the internal revenue code, he said, would allow companies based in different regions to file their taxes in their region. 

Topics: federal , local government units , Senate Majority Leader Juan Miguel Zubiri , Supreme Court
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