The City treasurer is now urged to recast the city budget for next year to adjust and fit itself to the new Supreme Court ruling on the inclusion of Bureau of Customs income as an overdue inclusion on top of the traditional IRA or Internal Revenue Allotment to local governments. Estimated increase of LGU IRAs will be about 50% minimum.
Unless reversed by the Supreme Court, the national government will have no other choice but to release the accumulated “just share” of the Local Government Units including franchise fees and customs duties paid to the Bureau of Customs.
Councilor Manuel Arbon asked City Treasurer Cristina M. Merced to inquire before the Department of Finance as to how and when will the release of estimated P 500 billion share due to the barangays, municipalities, cities and provinces in accordance to the decision of the Supreme Court.
The national government wanted to appeal the decision of the court. However, it is highly unlikely for the Supreme Court (voting 10-3 last July 4) to reverse its ruling that the basis for the just share of local government units under Section 6 Article 10 of the 1987 Constitution as being based on all national taxes (including those collected from Customs) and not only the national internal revenue taxes as provided in Section 284 of the Local Government Code.
At present, LGUs get 40% of national wealth or for the current is equivalent to P 522.7 billion that is taken from the collections of the Bureau of Internal Revenue alone, which was disputed by the petitioner Batangas Governor Hermilando Mandanas filed in 2012.
The City Treasurer will inquire before the Department of Finance if the City of Dumaguete will get a share of the estimated P 500 billion due to all Local Government Units of accumulated collectibles from the national government.
Still the division of the accumulated IRA will not be in uniform amounts to LGUs because it will be based on the formula that includes population, land area and the equal sharing.
Earlier the Supreme Court decided that Local Government Units must have a share in the collections not only from the Bureau of Internal Revenue but also those of the Bureau of Customs.
There are claims that all collections from the Customs are primarily used by the Office of the President as its social fund or “pork” and that of the ruling is enforced, it will significantly slash the appropriations for the executive departments.
But Councilor Arbon said that the estimated P 500 billion “IRA” differentials be released gradually and in tranches so as not to radically alter the budget of the national agencies.
Nevertheless, if proven correct, Merced like most LGU treasurers, will be very pleased considering that the city government has embarked on flagship projects to improve infrastructure and increase welfare benefits for the constituents.