Province expects P600-M drop in 2023 NTA share

By John Noel E. Herrera

The Province of Iloilo is expecting a cut P600-million cut in its National Tax Allotment (NTA) share, formerly the Internal Revenue Allotment, for 2023.

“Sa aton, P600 million man ang mabuhin,” Iloilo Governor Arthur Defensor Jr. said in a press conference.

Defensor revealed that he received information from the finance committee and the Department of Budget and Management (DBM) that the province’s share of the national revenue would be cut next year.

The governor also explained that the reduction of Iloilo’s share in NTA might be due to the lower tax collection by the national government as trade activities stagnated in 2020 during the surge of the coronavirus disease 2019 (COVID-19) pandemic.

“The basis of the computation of IRA is the revenue of the national government last 2020, which is the pandemic year, because there was no trade. If you do not have trade, no Customs collection. That is the problem and the basis,” Defensor added.

Section 284 of the Local Government Code mandates that the share of local government units (LGUs) in the national internal revenue taxes is based on the collection of the third fiscal year, preceding the current fiscal year.

Meanwhile, the provincial government is examining all the adjustments that they can make to the province’s budget because of a lower NTA share for 2023, as the finance committee is currently formulating the budget for 2023 to be submitted for the Sangguniang Panlalawigan’s approval.

Defensor also emphasized that the finance committee assured him that the effects of the budget cut on the operations of the provincial government would be manageable.

The governor also said that job hires and contract services might not be affected while they try to manage the impact of lower IRA as those employed by the provincial government are “not too many.”

Defensor is also hopeful that the national government’s collection will recover in 2021 and 2022.

For fiscal year 2022, the provincial government has an approved budget of P4.3 billion, which is P1 billion higher compared to 2021’s P3,234,509,176.

Here is the breakdown of 2022’s P4.3 billion budget:

-General fund – P979,334,480

-Capital Outlay – P13,700,000

-Special Purpose Lump Sum Appropriations – P1,918,102,022

-Maintainance and other operating expenses – P1,448,316,569