What Is Internal Revenue Allotment?

Internal Revenue Allotment (IRA) is the share of an individual municipality or province in the national internal revenue. It is the basis for the equitable distribution of resources among local government units (LGUs).

The 1987 Constitution provides that the LGUs shall have a share in the national internal revenue, as determined by law. The Local Government Code of 1991 delineates the formulas for the computation of the LGUs' shares in the internal revenue.

The LGUs' internal revenue allotment consists of the proceeds from the regular tax effort of the local government and its tax sharing with the national government. The regular tax effort of the local government refers to the taxes, fees, and charges imposed by the local government that are independently collected and accounted for.

The tax sharing of the local government with the national government refers to the taxes, fees, and charges that are turned over to the local government pursuant to national laws, such as the Internal Revenue Code, the Customs and Tariff Code, and the Local Government Code.

The local government's share in the national internal revenue is determined by the following formula:

IRA = (T/N) x (P/LG)

where:

IRA = internal revenue allotment T = total national internal revenue N = total number of LGUs P = total population of the LGU LG = land area of the LGU in square kilometers

The LGU's share in the national internal revenue is computed using the latest available data on the total national internal revenue, total number of LGUs, and the total population and land area of the LGU.

The internal revenue allotment is released to the LGUs on a quarterly basis. The first release is made on the last day of March, the second release on the last day of June, the third release on the last day of September, and the fourth release on the last day of December.

The Internal Revenue Allotment (IRA) is the share of national taxes collected by the central government that is given to local government units (LGUs). It is earmarked for specific purposes, such as infrastructure and social services.

The IRA is determined by the national government's revenue collections, which are constitutionally mandated to be automatically released to the LGUs. The Local Government Code (LGC) of 1991 specifies the formula for the allocation of the IRA among LGUs.

The formula takes into account the LGU's population, land area, and income. The LGU's share in the IRA is proportional to its share in these three factors.

The LGU's share in the IRA is not static. It changes every year, as the national government's revenue collections and the LGU's population, land area, and income change.

The IRA is an important source of revenue for LGUs. It enables them to finance their own development projects and deliver basic services to their constituents.

Without the IRA, LGUs would be heavily reliant on the national government for financial assistance. This would limit their autonomy and capacity to develop their own local economies.

The IRA is also an important tool for national government to promote 'decentralization' - the devolution of power and resources from the central government to local government units.

Decentralization is seen as a way to make the government more efficient and responsive to the needs of the people. It is also seen as a way to empower LGUs and give them a greater role in national development.

The national government has been devolving more and more power and resources to LGUs in recent years. The transfer of the IRA from the central government to LGUs is one of the most important aspects of this decentralization process.

The Internal Revenue Allotment (IRA) is the portion of the taxes collected by the national government from local government units (LGUs). It is one of the three major sources of income for LGUs. The other two are the real property tax and the share in the national taxes.

The IRA is calculated using the following formula:

IRA = (A x B) - C

Where:

A = National Internal Revenue Collected

B = Population of the LGU

C = 1/3 of the IRA of the previous year

The national internal revenue collected refers to the total taxes collected by the national government. This includes the value-added tax, excise tax, customs duty, and other taxes.

The population of the LGU is used in the calculation because the internal revenue is collected from the people living in the locality. The larger the population, the bigger the IRA.

The 1/3 deduction from the previous year's IRA is called the counterpart fund. This is the money that the LGU should contribute to the national government for various development projects.

The IRA is released to the LGUs on a quarterly basis. The first tranche is released on the last week of March, the second tranche on the last week of June, the third tranche on the last week of September, and the fourth tranche on the last week of December.

The LGUs can use the IRA for any purpose. However, a certain percentage should be allotted for specific purposes, such as the payment of salaries of government employees and the maintenance of peace and order.

The Internal Revenue Allotment (IRA) is the share of taxes collected by the national government that is automatically given to local governments. The allotment is based on the population of a locality and its capacity to generate revenues. Local governments are required by law to use IRA funds for specific purposes, such as public works, social services, and payment of salaries of local officials.

The IRA has been a source of controversy since its inception. Critics argue that it gives local officials too much discretion over how to use funds, leading to corruption and wasteful spending. Others argue that the IRA is an essential tool for ensuring that local governments have the resources they need to function properly.

There are a number of benefits of the IRA. First, it provides a reliable and predictable source of funding for local governments. This is especially important in developing countries, where national governments often do not have the resources to provide significant financial support to local governments. Second, the IRA helps to ensure that local governments have the resources they need to provide basic services to their constituents. This is especially important in rural areas, where local governments may be the only source of basic services such as healthcare and education. Third, the IRA can help to promote accountability and transparency in local government. By requiring local officials to use IRA funds for specific purposes, it becomes easier for citizens to hold their officials accountable for how those funds are used.

Despite the controversy surrounding the IRA, it is clear that it provides a number of benefits to local governments. These benefits make it an essential tool for ensuring that local governments have the resources they need to function properly and to provide essential services to their constituents.

The Internal Revenue Allotment (IRA) is the share of national taxes that is automatically given to local governments. This share is determined by the Constitution and can only be changed through a constitutional amendment. The IRA is the main source of revenue for local governments and has a significant impact on their finances.

The IRA was first established by the Constitution of the Philippines in 1987. It was then increased by the Local Government Code of 1991. The code also directed the national government to give local governments a larger share of the taxes collected from their respective jurisdictions. The IRA currently stands at 50% of the national taxes collected.

The IRA is used to finance the operations of local governments, including the salaries of local officials and employees, infrastructure projects, and social services. It is also used to fund the share of LGUs in the Internal Revenue Taxes of the national government.

The impact of the IRA on local governments can be both positive and negative. On the positive side, the IRA gives local governments a stable and predictable source of revenue. It also allows them to plan and budget their expenditures based on a known and fixed amount of revenue.

On the negative side, the IRA can limit the ability of local governments to raise additional revenue. This is because the Constitution caps the IRA at 50% of the national taxes collected. As a result, local governments may find it difficult to finance additional expenditure items not covered by the IRA.

The impact of the IRA on local governments also varies depending on the size of the LGU. For example, LGUs with a large population and a large tax base may be able to raise more revenue than their smaller counterparts. This is because they have a greater ability to generate revenue from sources other than the IRA.

In general, the IRA has a positive impact on local governments. It gives them a stable and predictable source of revenue, which can be used to finance essential expenditure items. However, the IRA can also limit the ability of local governments to raise additional revenue. This is something that should be taken into account when determining the appropriate level of the IRA.

The internal revenue allotment is the share of taxes collected by the national government that is given to local governments. This system is used in countries with a federal system of government, such as the United States and Canada. The internal revenue allotment is a controversial topic because it gives more power to the central government and lessens the power of the states or provinces.

The main challenge associated with the internal revenue allotment is the way it affects the distribution of power between the central government and the states or provinces. The central government collects all the taxes and then distributes the money to the states or provinces according to a formula. This system gives the central government more power because it can decide how to spend the money and how much money to give to each state or province. The states or provinces have less power because they cannot raise their own taxes and they have to rely on the central government for their funding.

Another challenge associated with the internal revenue allotment is that it can lead to a lot of bureaucracy. The central government has to collect the taxes, distribute the money, and then oversee how the money is spent. This can lead to a lot of waste and inefficiency.

Finally, the internal revenue allotment can be unfair to some states or provinces. The formula used to distribute the money can be biased in favor of some states or provinces and against others. This can lead to tension and conflict between the different levels of government.

Despite these challenges, the internal revenue allotment is a key part of the federal system of government. It gives the central government more power and control over the states or provinces, which can be helpful in times of crisis or when there is a need for national unity.

The internal revenue allotment (IRA) is the share of taxes collected by the national government that is given to local governments. The IRA is the primary source of income for local governments in the Philippines.

The current system of distributing the IRA is based on the 1990 Local Government Code. The Local Government Code of 1991 created the Local Government Units (LGUs) and allocated 40% of the national taxes to them. The IRA is divided among the provinces, cities, and municipalities based on their populations, and each LGU gets a share of the taxes collected in their territory.

The problem with the current system is that it is unequal and unfair. The wealthiest provinces and cities get the most money, while the poorest municipalities get the least. This is because the allocation is based on population, not on need.

There are several ways to improve the system of distributing the IRA. One way is to base the allotment on the LGUs' actual needs. Another way is to base it on the LGUs' ability to generate revenue. A third way is to give more money to the LGUs with the poorest people.

The best way to improve the IRA is to base it on the LGUs' actual needs. This means that the LGUs with the most poverty, the most infrastructure needs, and the most social service needs would get the most money. This would ensure that the money is spent where it is needed most, and would help to reduce inequalities between LGUs.

The IRA should also be given to the LGUs on a quarterly basis, instead of annually. This would allow LGUs to budget and plan better, and would make sure that they have the money when they need it.

The national government should also work closely with the LGUs to make sure that the money is spent wisely and effectively. The LGUs should be required to submit plans and reports on how they plan to use the IRA, and the national government should provide oversight to ensure that the money is being spent as intended.

Improving the internal revenue allotment would be a major step towards reducing poverty and inequality in the Philippines. It would ensure that local governments have the resources they need to provide basic services, and would help to make sure that the money is spent where it is needed most.

The Internal Revenue Allotment (IRA) is the share of national tax revenue collected by the National Government that is automatically appropriated to Local Government Units (LGUs). It is mandated by the Constitution and it is the largest source of income for LGUs.

The concept of the IRA was first introduced in the 1987 Constitution. It was a response to the call for decentralization and devolution of powers and functions from the central government to local government units. The goal was to allow LGUs to have a direct and more efficient source of income, so that they could better serve their constituents.

Prior to the IRA, LGUs relied on the national government for their funding. This system was often inefficient and led to corruption, as LGUs would use their influence to try and get a larger share of the national budget. The IRA was meant to be a more transparent and equitable system.

Under the 1987 Constitution, the IRA was initially set at 30% of the national tax revenue. This was increased to 40% under the Local Government Code of 1991. The code also mandated that the IRA be reviewed every five years and that it may be increased based on the needs of the LGUs.

In recent years, there have been calls to further increase the IRA, as LGUs continue to face budget constraints. The national government has also been looking for ways to increase its own revenue, and has been hesitant to give LGUs a larger share of the pie. As a result, the IRA has remained at 40% since 1991.

Despite the challenges, the IRA has been a success story in Philippine local governance. It has empowered LGUs and given them the resources they need to serve their constituents. It has also helped to decentralize power and authority, and to make the government more responsive to the needs of the people.

evolution of the internal revenue allotment

The internal revenue allotment is a share of the total national internal revenue taxes collected by the national government that is automatically given to local government units (LGUs) per the 1987 Philippine Constitution. The LGUs' share in the internal revenue taxes shall not be less than 20%.[1]

The LGUs' internal revenue allotment has evolved over time and has been the subject of various laws and court decisions.

TheLocal Government Code of 1991 increased the LGUs' share in the internal revenue taxes from 20% to 40%. [2]

The Supreme Court, in the case of Tan v. Del Rosario (G.R. No. L-68520, October 14, 1985), held that the LGUs are entitled to 40% of the national internal revenue taxes collected by the national government. The case was brought by the Province of Laguna, which challenged the constitutionality of a presidential decree that directed the national government to retain 60% of the national internal revenue taxes collected and to give the remaining 40% to the LGUs.

The court held that the LGUs are entitled to a share in the national internal revenue taxes as a matter of right and not by mere generosity of the national government. The court also noted that the national government has the power to tax only insofar as it is necessary for the proper function of the government. The court therefore upheld the 40% internal revenue allotment for the LGUs.

The Local Government Code of 1991 was later amended by the Local Government Code of 2001, which increased the LGUs' share in the internal revenue taxes to 50%. [3]

In the case of Geronimo v. Department of Finance (G.R. No. L-106274, March 12, 1993), the Supreme Court held that the LGUs are entitled to a share in the national internal revenue taxes as a matter of right and not by mere liberality of the national government. The court also held that the national government has the power to tax only insofar as it is necessary for the proper function of the government. The court therefore upheld the 50% internal revenue allotment for the LGUs.

The Local Government Code of 2001 was later amended by the Local Government Code of 2013, which increased the LGUs' share in the internal revenue taxes to 60%. [4]

In the case of League of Cities of the Philippines v

The internal revenue allotment is a constitutional mandate that guarantees that a percentage of all government revenues will be apportioned among the country's regions. This means that each region is guaranteed a certain amount of money from the national government's total revenue. The internal revenue allotment is important because it ensures that all regions of the country receive a minimum level of funding from the national government. This is especially important in developing countries, where many regions are economically disadvantaged.

The internal revenue allotment has been in place since the early days of the Philippine republic. It was first enshrined in the constitution in 1935, and has been amended several times since then. The current version of the internal revenue allotment guarantees that each of the country's regions will receive at least 20% of all government revenues. This figure was increased from 15% in the 1987 constitution.

The internal revenue allotment is an important source of funding for the country's regions. It ensures that all regions receive a minimum level of funding from the national government. This is especially important in developing countries, where many regions are economically disadvantaged. The internal revenue allotment is also important because it helps to equalize the playing field between the country's regions. Without the internal revenue allotment, some regions would be at a disadvantage when competing for government funds.

The internal revenue allotment has been criticized by some as being unfair to the country's richer regions. They argue that the richer regions are subsidizing the poorer regions. However, the internal revenue allotment is an important tool for ensuring that all regions of the country receive a minimum level of funding from the national government.

Overall, the internal revenue allotment is an important mechanism for ensuring that all regions of the country receive a minimum level of funding from the national government. It is an important tool for Equalizing the playing field between the country's regions.