The case of the missing IRA (Part II)

Finally somebody is going to file a case in the Supreme Court to settle—once and for all, supposedly—the fight among our beloved law-abiding decent public officials over the IRA.

It is the multibillion-peso internal revenue allotment, the share of LGUs in the national tax collection that, under the law, the government must give to LGUs every year.

For 2012, the IRA was estimated at more than P270 billion, but the LGUs as a group contested the amount, which was the computation of the Aquino (Part II) administration, particularly the Department of Budget and Management.

Rep. Hermilando Mandanas (Batangas) told us he would file a case before the Supreme Court, apparently to force the Aquino (Part II) administration to give additional P70 billion in IRA to the LGUs this year.

He is the same Mandanas who recently resigned from the Liberal Party of our leader Benigno Simeon (a.k.a. BS), purportedly because Mandanas was removed as chair of the powerful ways and means committee of the House of Representatives.

BS claimed in public that the removal of Mandanas had nothing to do with the latter’s refusal to sign the articles of impeachment against Chief Justice Renato Corona. BS said his issue against Mandanas concerned the IRA.

For the sake of action stars in the Senate, the bone of contention in the IRA this time is the computation. The law says the IRA should be 40 percent of the national “internal” revenue. (Actually, nobody can explain up to now where the figure “40 percent” came from. From what I gathered it was plucked from the air.)

In defining what is “internal” revenue, the Aquino (Part II) administration excluded the collections of the Bureau of Customs, particularly import duties and taxes, including import VAT, or value-added tax.

By the way, with the IRA already at 40 percent of the “internal” revenue, which should include the taxes that we all remit to the BIR, the LGUs are still agitating for a higher share of up to 60 percent.

Anyway, regarding the IRA computation, the LGUs contend that the import VAT should form part of the “internal” revenue, since the BoC is only collecting it for the BIR.

To settle the dispute, Mandanas therefore plans to seek a ruling by the Supreme Court. He said he was even prepared to ask the high tribunal for a TRO against the 2012 budget. After all, his timing is great. The Supreme Court and the Aquino (Part II) administration are, shall we say, not in good terms of late.

I am not certain that any Supreme Court ruling, perhaps as a way to establish jurisprudence on the IRA computation, can stop all the fight over the IRA. I am afraid that our beloved law-abiding decent public officials will still continue to fight over the IRA. Some other issues will surely surface in the future.

Records showed they have been fighting over the IRA for the past 20 years, ever since the Local Government Code, or RA 7160, the originator of the IRA.

It is now clear they have been fighting over the IRA for only one reason: It is a lot of money. Did I tell you that this year the IRA was estimated to hit P273 billion? In the past, the IRA amounted to an equivalent of 20 percent of the budget for the whole year. Really, we are not talking of peanuts here.

Thus a number of cases have already been filed before the Supreme Court over the IRA. It was claimed, for instance, that way back in 1992, or since the time of former President Fidel V. Ramos, the government has been denying LGUs their share in the IRA. Based on one claim, the government now owes the LGUs a fantastic amount of P500 billion.

Question: Where will the government get that kind of money? I know—from all of the guys down here, perhaps by taxing us to death.

LGUs are saying that even today the government, under our leader BS, is using the IRA that should have been given to the LGUs. In other words, BS and company must be doing something illegal.

Still, during the presidential elections in 2010, as one of his campaign promises, BS said he would try to cut the IRA for the nonperforming LGUs—i.e. those ridden with graft and corruption. After all, whether the LGUs like it or not, the IRA does not just fall from heaven. It comes from our hard-earned tax money.

Perhaps the LGUs can ride on the forthcoming impeachment of Corona to get a sympathetic ruling from the Supreme Court—i.e. hostile to the Aquino (Part II) administration. Well and good!

But to many of the guys down here, the issue on the IRA is not just its computation, which the Supreme Court case can hopefully settle. There are other, perhaps even bigger issues.

For instance, the burning question in business on the IRA is this: How did we fare in terms of economic development ever since the IRA started about 20 years ago? After all those years, perhaps it is time for us to take a serious look into this money scheme that has cost us, the taxpayers, hundreds of billions already.

The sad truth on the IRA is that, after all those years, nobody still knows how effective it has been in bringing about economic development. It seems that none of our beloved law-abiding decent public officials, both in the national level and in the LGUs, would bother to know.

Really, even with all the bright minds in this country, we hardly have any scientific ways to monitor the success—or failure—of the IRA as a tool for economic development. You know, some cost-benefit analysis! What kind of progress did the LGUs achieve with all those hundreds of billions of our tax money over all those 20 years?

Like it or not, as things stand today, to the LGU officials, the IRA is just like “pork” to the legislators. Better yet, it is out and out pork, called a different name, legitimized by laws enacted by people in the legislature who, at one time or another, have benefited or who, in the future, stand to benefit from the multibillion peso IRA.

In this country, it is easy for congressmen, mayors and governors to exchange positions during elections. They can rotate among themselves what political dynasty handles the IRA.

After all the IRA is only our tax money.