Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
-October1992
..... ISSN0115-9097 ]
OF1991 to8rowtk
one werehow
x_membem otm_ bycontinin
numerous avenues8
"walls" that only stagnated the economy
rather than united the people. Alas, ff the
by Rosario G. Manasan "k_s _ ant_," =,=ot,_,_,e
ResearchFellow,PIDS ,._vt_=_aR,.a_,-
_m,_th,=_._ily
singing the tune of "Divided We S=nd,
FiscalDecentralization... tinent legislations like PD 231 one hand, and the cost of de-
(Frompage 1) (Local Tax Code). volved functions, on the other,
and the distribution of the IRA
the L_;Us, the LGC, in principle, In the following pages are across different levels of LGUs.
provides LGUs with a higher two related articles analyzing The second talks about thevari-
share in the national taxes with some of the provisions of the 1991 ous revenue-generating and tax-
greater certainty so that they can LGC as theyimpact on the finan- ing powers of the LGUs. It is
effectively perform their new cial position of LGUs. The first hoped that the analyses would
tasks. It also broadens the taxing one deals with the balance be- be useful in identifying the
and revenue-raising powers of tween the increment in the Inter- strengths and weaknesses of the
the LGUs relative to earlier per- nal Revenue Allotment (IRA),on LGC. O
LGU'sSliceofInternalRevenue
Allotment
fromtheNationalPie
Through the 1991 LGC, oftheLGC'simplementation, theIRA
LGUs are entitled to a share in the shares of LGUs will almost triple
gross national internal revenue taxes relative to the previous year's level.
based oncollectionsin the third year However, under the LGC, the vari-
preceding the current one, at a rate ous allotments and aids from the
of 30 percent in the first year of national government to LGUs that
LGC's implementation, 35 percent comprised what used to be known as
in the second year, and 40 percent in National Assistance to Local Govern-
every year thereafter. However, in ment Unit (NALGU) funds are now
the ev_mt that the national govern- integrated with the IRA. Thus, it is
ment it_urs an unmanageable pub- more appropriate to compare the 1992
lic sector deficit, the internal reve- IRA with the 1991 NALGU level.
nue allotment (IRA) may be re-
duced, but in no case shall it be less The full implementation of
than 30 percent of net Bureau the 1991 LGC implies that IRA to
of Internal Revenue (BIR) tax re- LGUs in 1992 should equal P24.4 bil-
ceipts, lion. While this represents a hefty
111.8 percent increase over the P8.5
In the old set-up, Presiden- billion IRA in 1991, in effect, it is a
tial Decree (PD) 1741 prescribed that mere 51 percentincrease over the P16.2
the IRA should not exceed 20 per- (_) billion NALGU in the same year.
cent of net
and that the internal revenue
IRA share of anytaxes
par- Oo Moreover,
ment in the the
totalP8.2 billion
national aidsincre-
and
ticularLGU should not increase by /i--. allotments .toLGUs under this sce-
: ........... 4,71:
,.change in total
_tiba Ofmaximum allowable tax tares 1993. it is fl-_edifference::
iOn:and the inflation:adjusted i992 level: SEFrevenucs are
iy be:used exdusiVelyfor cxluatiOn pr6:gramsi : i:
value