LGUs to get higher IRA next year

MANILA, Philippines — Local government units (LGUs) are set to receive P695.49 billion in internal revenue allotments (IRA) next year to support the delivery of their programs and projects, according to the Department of Budget and Management (DBM).

Pursuant to Local Budget Memorandum 80, dated May 18, signed by Budget Secretary Wendel Avisado, the IRA share of LGUs for fiscal year 2021 will increase by 7.18 percent from P648.92 billion this year.

Avisado said the amount was computed based on the Bureau of Internal Revenue (BIR)’s actual tax collections in 2018. That year, the BIR generated P1.95 trillion in revenues, which was 10 percent up from P1.77 trillion in the previous year.

“For the purpose of preparing the fiscal year 2021 annual budgets of LGUs, the total IRA shares of LGUs shall be P695.49 billion per certification of the BIR on the actual national internal revenue taxes collected in fiscal year 2018,” the memorandum read.

Of the total IRAs, P159.96 billion will go to 82 provincial governments. Some 146 city governments will also share the same amount of IRAs.

About P236.47 billion in IRAs will be allocated for 1,488 municipal governments, while P139.1 billion will be divided between 41,931 barangays.

In addition to the IRA, the DBM said some LGUs are also entitled to other special shares in the proceeds of national taxes.

These include shares in the proceeds from the utilization and development of national wealth; excise tax collections on Virginia, Burley and native tobacco products; gross income paid by enterprises within economic zones; value-added tax; and shares in fire code fees.

“The LGUs concerned are advised to coordinate with appropriate revenue collecting agencies and government corporations to reconcile their records with those of the collecting agencies to determine the amount of their shares from the said taxes,” the memorandum stated.

The DBM said LGUs should prioritize the use of IRAs and other local resources for the provision of basic services and facilities, particularly those devolved by the Department of Health, Department of Social Welfare and Development, Department of Agriculture, Department of Environment and Natural Resources, as well as other national government agencies, before utilizing them for other purposes.

“Each LGU shall appropriate in its annual budget no less than 20 percent  of its IRA for development projects, which is commonly known as the 20 percent Development Fund (DF), as mandated under Section 287 of Republic Act 7160,” it added.

The DBM said not less than five percent of the estimated revenue of LGUs from regular sources would be set aside for the Local Disaster Risk Reduction and Management Fund.

Barangays should also set aside 10 percent of the general fund of the barangay for the Sangguniang Kabataan, specifically for youth development and empowerment purposes.

The DBM has enjoined LGUs to formulate their 2020 budget plans, in line with the national government’s development plans, goals and strategies.

Moreover, given the uncertainty as to when the coronavirus disease 2019 or COVID-19 pandemic will end, the DBM encouraged LGUs to continue to provide funds for COVID-19-related measures.