Bataan legislator bares P1.84-trillion shortfall in local government’s IRA share

CLARK FREEPORT—The alleged wrong interpretation of the provisions of the Constitution has resulted in a huge shortfall in the Internal Revenue Allotment (IRA) of local governments amounting to P1.84 trillion from 2009 to 2014 alone.

Nationalist People’s Coalition Rep. Enrique “Tet” Garcia Jr. of Bataan said the insertion of the words “internal revenue” in Section 284 of the Local Government Code is “patently unconstitutional” causing the wrong interpretation of the law resulting in a huge shortfall.

During the “Balitaan” forum organized by the Capampangan in Media Inc. at the Bale Balita here, in cooperation with the Clark Development Corp. and the Social Security System, Garcia said it should be termed “National Revenue Allotment” instead of “Internal Revenue Allotment.”

Garcia said he has sent a letter to President Aquino, but it has remained unanswered up to now.

“I have sent a personal letter to the President which up to now has remained unanswered. That’s the problem with P-Noy…noynoying,” Garcia told members of the media, referring to Mr. Aquino’s penchant for delaying tactic on matters of great importance.

For 2014 Garcia said his province alone has accumulated a shortfall of some P1.46 billion.

He said an en banc petition to the Supreme Court (SC) with him as the sole petitioner urging the Court “to declare as unconstitutional Section 284 of Republic Act 7160,” was filed on August 28, 2013.

Garcia said even with him as the sole petitioner, he has the support of the local governments of his province, but revealed that the League of Provinces is timid in supporting his petition.

Named as respondents in the SC petition were Executive Secretary Paquito N. Ochoa Jr., Finance Secretary Cesar V. Purisima, Budget Secretary Florencio B. Abad, Internal Revenue Commissioner Kim S. Jacinto-Henares and then-Customs Commissioner Rufino Rozzano B. Biazon.

Garcia explained that “the shortfalls in the collection of taxes-duties, tax diversions and delay or nonremittance by unscrupulous accredited authorized banks of their tax-duty collections or both could easily exceed P100 billion annually.”

He said “these are made possible by the defective and obsolete tax-collection system that the government refuses to modify.”

In this context, “the government, specifically the Department of Finance, is primarily to blame for these problems that have persisted since the early 1980s, when the present system of collecting taxes and duties through banks was first instituted,” Garcia said.

source:  Business Mirror

Despite taxing power, local cities still rely heavily on IRA for funds

The Local Government Code of the Philippines has given autonomous powers to municipalities, cities and provinces to govern themselves and generate income without the intervention of the national government. With this, each local government can track its development growth on its own.

However, the Department of Finance said that on average, only 30 percent of cities' regular income come from local taxes and the rest still come from internal revenue allotments (IRA). In short, despite the autonomous status of LGUs, expecially cities, still heavily rely on national government doleouts.

Among the young cities, San Juan City (7 years of cityhood) takes home the top spot for generating the most income from local taxes at 76 percent of local income to regular income.

Makati City is the top mature city (19 years) with the highest share of local income to regular income at 92.6 percent.

Here are the numbers that would give the picture how your cities generate income for basic services:

• 144 - total number of cities in the Philippines
• 115 - number of cities with more than 10 years of cityhood
• 74 - cities whose local income is less than 30 percent of their regular income, regardless of years of cityhood
• 57 - cities whose local income is less than 30 percent of their regular income, despite more than 10 years since cityhoo
• 3.1 percent - lowest share of local income to regular income of a young city (Guinhulngan, 7 years of cityhood)
• 3.5 percent - lowest share of local income to regular income of mature city (Sipalay, 13 yearsof cityhood)

You want to see how your city generate income? Here is the list:





source:  InterAksyon

Court of Appeals rules for Globe in Isabela ‘tower fees’ case

THE COURT of Appeals (CA) has ruled in favor of Globe Telecom, Inc. after the latter contested a local ordinance enacted by Santiago City, Isabela imposing “tower fees” on its cellular sites.

The appellate court’s 11^th division, in a 19-page decision promulgated on May 30, nullified Santiago City’s Ordinance No. 6THCC-53 which ordered telecommunications companies to pay an annual P200,000 in “tower fees” as part of the city’s income generating schemes.

The CA decision reversed a Santiago City regional trial court (RTC) decision declaring the ordinance as valid and ordering Globe to pay P5.92 million in tower fees for its seven cell sites in the city.

“Evidently, there is no reasonable relation between defendant-appellee’s imposition of the subject tower fees and the promotion of health, morals, good order, safety or the general welfare of the people,” Associate Justice Vicente S.E. Veloso wrote.

Santiago City’s local government, in 2008, issued the resolution as part of its mandate under the Local Government Code’s General Welfare Clause.

The Santiago City RTC, in a May 10, 2012 decision, found that the ordinance was consistent with a local government’s authority to regulate companies operating within its jurisdiction.

However, the appellate court said the ordinance failed to adequately justify its regulation and restraint of property rights, and called the fee “patently oppressive, confiscatory and prohibitive.”

Associate Justices Jane Aurora C. Lantion and Nina G. Antonio-Valenzuela concurred with the decision. -- Mikhail Franz E. Flores

source:  Businessworld

4 in every 5 cities fall behind their potential property tax collection

Four out of 5 cities in the country have fallen behind in their real property tax collections, according to the Department of Finance (DOF).

In its latest Tax Watch Ad, the DOF said only 27 of the country's 143 city governments have updated their schedule of market values (SMV).

The SMV is used to determine how much a property is worth and therefore the corresponding tax due.

Under the Local Government Code of 1991, local government units (LGUs) are required to revise their SMV and conduct a general revision of property assessments and classifications once every three years.

Failure to update the SMV means an LGU's tax collections would fail to keep up with the increase in the value of properties in its jurisdiction.

Since the real property tax is a major revenue source for the LGU, its failure to update the SMV would result in depending more on the national government -- through the so-called internal revenue allotment (IRA) -- to finance social services in the locality.

In Metro Manila alone, only the cities of Manila and Muntinlupa have updated their SMV.
The 25 other cities around the country that complied with the law are as follows: Balanga, Batangas, Binan, Bislig, Calamba, Candon, Cauayan, Digos, Escalante, Himamaylan, Iligan, Koronodal, La Carlota, Lapu-Lapu, Marawi, Masbate, Ozamis, San Pablo, Science City of Munoz, Sorsogon, Surigao, Tagum, Talisay (Cebu), Tangub, and Victorias.

Mandaue City held the record of having the most outdated SMV, which was last updated in 1991. The full list of cities and the corresponding number of years they have fallen behind in updating their SMV can be seen below:



source:  InterAksyon