IN KNOWLEDGE: The Mandanas Supreme Court Decision

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In 2013, Batangas Governor Hermilando Mandanas and former Bataan Governor Enrique Garcia Jr. questioned how the Internal Revenue Allocation (IRA) of Local Government Units (LGU) was calculated.

In a petition, they asked the Supreme Court to force the national government to calculate the IRA based on all taxes collected.

Accepting the petition in July 2018 and reaffirming it the following year, the court ruled that the IRA must come from 40% of all domestic taxes collected by the Bureau of Internal Revenue (BIR) and the Bureau of Customs. Under the old system, the allocation came only from taxes collected by the BIR.

With the SC’s decision, the Department of Budget and Management (DBM) estimated that first-class provinces would have an increase of about 814 million pesos in their IRA, bringing it to 4.4 billion pesos per year. next year ; highly urbanized cities, up from 394 million pesos to 2.13 billion pesos; and first-class municipalities, up from 187.62 million pesos to 1.01 billion pesos.

With the largest IRA expected to absorb a large chunk of the national budget of 5.024 trillion pesos for 2022, the DBM said the various functions of national government that should be devolved to local governments “must be permanently removed from national agencies. to empower LGUs to assume them. These functions include health services, local infrastructure, income mobilization, employment facilitation, social protection, housing, natural resource management and agricultural services.

Sources: Archives des investigateurs, constitutionnalreform.gov.ph

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