IRA OF Municipalities The Internal Revenue Allotment (IRA) is a local government units (LGU) share of revenues from the

Philippine national government. Provinces, independent cities, component cities, municipalities, and barangays each get a separate allotment. The allotment is largely based upon the type of government they are and a formula based upon their land area and population. Section 284 of the Local Government Code of the Philippines (RA 7160) sets up the formula for the distribution of the allotment. All or nearly all of the revenue that a local government has to spend comes from their IRA, though some local governments also have additional local sources of revenue such as property taxes and government fees. Typically for municipalities, the IRA accounts for 90% of total revenues. Since cities have more sources of local revenues, their IRA ranges from 50% to 70% of their total budget. A portion of each local government unit's allotment is set aside their Sangguniang Kabataan (SK) or youth council. Since the money comes from the national government, it is possible for the distribution of the allotment to be delayed or prevented if they local government unit is a political opponent of those in control of the money. Estimating Prospective IRA Shares. LGUs can easily estimate their prospective IRA shares using the following steps: Step 1 Get the total IRA allocation from GAA or BIR Cert ification Step 2 Compute for the total share of provinces, cities, municipalities or barangays TOTAL IRA x 23% (Province) = IRA Share of Province TOTAL IRA x 23% (Cities) = IRA Share of Cities TOTAL IRA x 23% (Municipalities) = IRA Share of Mu nicipalities TOTAL IRA x 23% (Barangays) = IRA Share of Baranga ys Step 3 (a) For the share of individual province, city, or municipality, compute for the allocation per factor Example for the province: 23% Share of the Province x 50% (Population) = Al locable Share (Pop.)

23% Share of the Province x 50% (Land Area) = All ocable Share (L.A.) 23% Share of the Province x 50% (Equal Sharing) = Allocable Share (E.S.) (b) Then compute for the proportionate share of the province with respect to total of all provinces Step 4 Add the shares of the province from all the three factors. The summation represents the total IRA of the subject province. This process can be utilized to determine the IRA shares of cities and municipalities. For the barangays, Step 3 shall be changed as shown below: Step 3 (a) Determine the number of barangays with 100 inha bitants and multiply it by P80,000. (Number of barangay with 100 inhabitants) x (P80, 000) = Share of Barangays with 100 inhabitants (b) Deduct the result from the 20% IRA shares of th e barangays to get the remaining allocable share (c) Distribute the remaining allocable share to the two factors Allocable Share for Population = Remaining Alloc able Share x 60% Allocable Share for Equal Sharing = Remaining All ocable Share x 40% (d) Determine the additional share of individual ba rangays by getting their proportionate allocation in relation to all baranga ys based on population shown and equal sharing.

City mayors join call for higher IRA share of LGUs

August 19, 2013 7:34 am

BACOLOD CITY, Aug. 18 A city mayor in Negros Occidental who occupies one of the top posts in the League of Cities of the Philippines (LCP) said their group is supporting the call to provide higher Internal Revenue Allotment Share (IRA) for local government units (LGUs). Talisay City Mayor Eric Saratan, executive president of LCP, said the time has come to revise the Local Government Code to increase the IRA share of the cities and municipalities. At present, LGUs get 40 percent while the remaining 60 percent goes to the national government. He called on the former mayors who are now members of the House of Representatives to help the LCP in pushing for more IRA share. Saratan said that highly-urbanized cities that encounter big challenges particularly in garbarge disposal and traffic management need more IRA share to address these concerns. "We are only asking for reasonable increase in IRA share, he added. The Philippine Councilors League, through chairman Alan Zulueta, also expressed the need for a higher IRA share for LGUs. Zulueta, who was in Bacolod last week, said the 60 percent should instead go to the LGUs while only 40 percent should be shared to the national government. The LCP chairman added that since the LGUs are carrying out the devolved functions of the national government they should get a higher IRA share of 60 percent or at least 50 percent. (PNA)
TUGUEGARAO CITY — Ninety-one municipalities and two cities in Cagayan Valley are facing huge cuts in their annual Internal Revenue Allotments (IRAs) after a 2004 land survey reduced their land areas significantly.

Alberto Obedoza, land management survey division chief of the Department of Environment and Natural Resources (DENR) here, said the results of their latest survey could spell at least 20 percent decrease in the IRAs of the 91 towns and the cities of Santiago and Cauayan, both in Isabela.

With the survey results, Santiago City’s annual IRA of P444 million may be reduced by almost 50 percent.

The affected municipalities include Cabatuan, Santo Tomas and Divilacan in Isabela; and Aritao, Dupax del Sur and Dupax del Norte in Nueva Vizcaya.

Obedoza said the latest political and territorial land survey showed that the total land areas of these towns were far less than what were originally registered.

Aside from population, land area is one of the bases which the national government looks into in allocating the IRA of each town, city and province, including the barangays.

Erroneous perimeter surveys, overlapping boundaries and land disputes are some of the reasons why there are discrepancies in the land area figures of local government units and the DENR, Obedoza said.

Cagayan Valley is composed of Nueva Vizcaya, Quirino, Isabela, Cagayan and Batanes. It has a total land area of 2,683,758 hectares, including 960,064 hectares of alienable and disposable lands.

The survey results have been submitted to the Office of the President and the Department of

he internal revenue allotment (IRA) for local government units (LGUs) this year grew 37.5 percent to P302.3 billion, boosted by higher revenue collections in 2010, The Department of Budget and Management said Wednesday. Internal tax revenues generated in 2010 to P822.6 billion, up 9.6 percent from the P750.3 billion collected in 2009. The IRA is based on collections of national internal revenue in the three years before the current fiscal year, according to Section 284 of the Local Government Code (LGC), which mandates the share of LGUs from the collections. "The energetic revenue collection efforts that marked the beginning of the Aquino administration helped generate higher revenues in 2010, which translates to higher budgetary support for our LGUs this year, said Budget and Management secretary Florencio B. Abad. With bigger IRA shares now available to them, our local governments will have more legroom to boost their operational efficiencies and improve the delivery of key goods and services to the public," Abad added.

The 2013 IRA will be distributed to 81 provinces, 143 cities, 1,479 municipalities, and 41,889 barangays, including the newly created cities of Ilagan in Isabela, Mabalacat in Pampanga, and Cabuyao in Laguna. The province of Dinagat Islands will also get its IRA after the legal resolution of its status as a province, the Budget chief noted. On Oct. 24, 2012, the Supreme Court upheld the constitutionality of Republic Act 9355 which created the province. "With the finality of the court's decision, the local government of Dinagat Islands can finally jump-start the development of the province and push for the prompt delivery of services to its constituents. The Administrations goal has always been to institute rapid, inclusive, and sustainable growth for all Filipinos, and the people of Dinagat Islands are no exception to that," Abad said. A MINDANAO lawmaker has proposed a bill granting the internal revenue allotment (IRA) to barangays created by the Sangguniang Panlalawigan and Sangguniang Panglungsod. House Bill 65, filed by Rep. Anthony del Rosario of the First District of Davao del Norte, aims to help these political units perform effectively and implement poverty alleviation activities in their respective areas. The bill also seeks the amendment of Section 6 of Republic Act (RA) 7160, on the Authority to Create Local Government Units (LGUs), by providing that an LGU may be created, divided, merged, abolished or its boundaries substantially altered only by law enacted by Congress in the case of a province, city, municipality or any other political subdivision subject to such limitations and requirements prescribed in the Local Government Code. The bill also seeks the amendment of Section 285 of RA 7160, on the Allotment of IRA Taxes, so that the share of LGUs in the internal revenue allotment shall be allocated thus: provinces, 23 percent; cities, 23 percent; municipalities, 34 percent; and barangays, 20 percent. The bill provides, however, that the share of each province, city, and municipality shall be determined on the basis of the following formula: population, 50 percent; land area, 25 percent; and equal sharing, 25 percent. The bill further provides the share of each barangay with a population of not less than 100 inhabitants shall not be less than P80,000 per annum chargeable against the 20-percent share of the barangay from the IRA, and the balance to be allocated on the basis of the formula: On the first year of the effectivity of this Code: population, 40 percent; and equal sharing, 60 percent. On the second year, population 50 percent; and equal sharing, 50 percent. On the third year and every year thereafter: population, 60 percent; and equal sharing, 40 percent.

The bill also provides that all barangays created by the Sangguniang Panlalawigan and Sangguniang Panlungsod pursuant to Section 9 of RA 7160, as amended, shall be entitled to an IRA share in accordance with the formula prescribed under Section 285 of the Code after the effectivity of the proposed Act. The bill, however, said barangays created by LGUs which failed to meet the population requirement under Section 386 of the Code shall not be entitled to the benefit under the proposed Act. On his part, del Rosario said that he saw it relevant to re-introduce the proposal filed in the 14th Congress to avoid further financial deprivation of non-IRA barangays and likewise accord them full autonomy. MAASIN CITYBarangay (village) Guinsaugon, St. Bernard, Southern Leyte. Population: Zero. Internal Revenue Allotment (IRA): Zero. After half of a mountain collapsed and buried the entire village in 2006, the government also virtually erased from its records the community that once thrived in Guinsaugon, a farming area. For years, residents of the village who lived through the tragedy and moved to another area were nonexistent as far as government census records are concerned. Erasing the people of Guinsaugon from government records could have been done as simply as thiscensus takers visit the landslide site, take a look around and, finding no house standing, write down zero on their population tally forms. After seven years, the people of Guinsaugon may finally be able to put themselves back in official existence. A $27,000 donation was given to them to help them build homes, restore farms and make government see that there are people again on what many had thought is now just a graveyard covered by tons of boulders, soil and debris that collapsed on homes and bodies that have never been recovered. The money would be used, according to village chief Beauty Cabacungan, to resurvey Guinsaugon. Cabacungan said the donation gave survivors of the landslide, who cling to their identities as the people of Guinsaugon, hope in reclaiming their farms and their IRA, the villages share in national income. Cabacungan said while the survivors of the landslide kept returning to the original village site to farm, they had not been allowed to build homes there. She is now asking authorities to allow the people to build even shacks on top of the landslide site. Most of us are farmers, Cabacungan said.

According to Nap Cuaton, the mayor of St. Bernard, the donation came from various sources. The money is being held in trust in bank. Cuaton said he would seek advice from the Mines and Geosciences Bureau and Department of Interior and Local Government over Cabacungans request for the people to be allowed to build houses again where Guinsaugon originally stood. More than 1,000 people, including more than 200 children trapped in their classrooms, had been buried alive when a portion of Mt. Kan-abag collapsed after several days of heavy rains, sending tons of boulders and soil hurtling down Guinsaugon on Feb. 17, 2006. Survivors had been transferred to the village of Magbagakay, also in St. Bernard, near the boundary of San Juan town, which refuses to cede jurisdiction over the relocation site, leading to a boundary dispute. RESIDENTIAL DECREE No. 144 March 3, 1973 REVISING THE PRESENT SYSTEM OF NATIONAL INTERNAL REVENUE ALLOTMENTS TO LOCAL GOVERNMENTS WHEREAS, under the National Internal Revenue Code and other existing laws, internal revenue allotments are apportioned among the local governments on the basis of various formulas for distribution; WHEREAS, the present system of internal revenue allotments has resulted in a lopsided distribution of funds among the local government units such that a few provinces and cities receive greater shares while the majority receive less; WHEREAS, for purposes of administrative simplicity and efficiency and in order to establish a more equitable system of distribution of allotments and introduce the developmental concept in the allocation of funds to local governments, it has been imperative and compelling to revise the present internal revenue allotment system; NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution as Commander-in-Chief of all the Armed Forces of the Philippines, and pursuant to Proclamation No. 1081, dated September 21, 1972, and General Order No. 1, dated September 22, 1972, as amended, in order to transform the tax system into an effective tool for the implementation of the desired changes such as income redistribution and reforms in our new society, do hereby order and decree that the present system of national internal revenue allotments to local governments be revised as herein provided: 1. Twenty per centum of the collections from national internal revenue taxes not otherwise accruing to special funds and special accounts in the general fund shall accrue to local governments to be computed on the basis of the collections of the third fiscal year preceding the current fiscal year.

2. This allotment shall be distributed as follows: Thirty per centum (30%) to provinces Forty-five per centum (45%) to municipalities Twenty-five per centum (25%) to cities 3. The share of each local government unit shall be determined on the basis of the following formula: Seventy per centum (70%) Population Twenty per centum (20%) Land Area Ten per centum (10%) Equal Sharing 4. For the first three fiscal years of implementation of this Decree (FY's 1974, 1975 and 1976) the annual allotment of any local government shall not increase by more than fifteen per centum (15%) nor decrease by more than fifty per centum (50%) of its actual allotment during the fiscal year 1970-71. Thereafter, the shares of each local government shall be determined solely on the basis of Section 1, 2 and 3 hereof. 5. There is hereby created a barrio development fund to be constituted of the ten per cent shares of the barrios in real estate tax collections as provided under Republic Act No. 3590 (the Revised Barrio Charter) and annual contributions from each province, city and municipality in an amount not exceeding P500 per barrio, which fund shall be spent solely for community development projects that would meet the requirements set forth by the Secretary of Local Government and Community Development. The Provincial Treasurer shall be the custodian of this fund and he shall maintain in his books a special account therefor. Releases of this fund shall be made through the Municipal Treasurer concerned who shall be responsible for the proper disbursement and accounting of the same. 6. Each province, city and municipality shall appropriate in its annual general fund budget no less than twenty per centum (20%) of its annual allotment for development projects. The development plans of the local units shall be subject to the approval of the Secretary of Local Government and Community Development, who shall issue the necessary guidelines for the purpose. 7. In addition, five per centum (5%) of the collections from national internal revenue taxes not otherwise accruing to special funds and special accounts in the general fund shall accrue to a

local government fund which shall be released by the President as financial aid to local governments or to projects. 8. This revised allotment system shall take effect July 1, 1973. 9. The Secretary of Finance shall issue the necessary rules and regulations for the prompt and effective implementation of this decree. All laws or parts of law inconsistent herewith are hereby revoked or modified accordingly. Done in the City of Manila, this 3rd day of March, in the year of Our Lord, nineteen hundred and seventy-three.