BAGUIO CITY, July 10 (PNA) — Having ran a city for three terms, now Valenzuela City Representative Sherwin Gatchalian knows how hard it is for local chief executives and local councils to raise revenues and keep their local government unit (LGU) running.
As such, he is a strong proponent of giving what is due to LGUs whether in the form of the Internal Revenue Allotment (IRA) or through direct payment of taxes.
This was the position of Gatchalian as he toys with the idea of running for a senatorial seat next year which he announced on July 8.
According to Gatchalian, there is a need to empower the fiscal capabilities of LGUs so as to ensure their ability to give basic social services to their constituents.
“Some Php 520 million is being deprived LGUs because of a fluke in the law which grants the IRA to LGUs by the national government,” he said.
He explained the law did not take into consideration customs collections which should form part of the IRA and which could be as much as Php520 million a year.
“Aside from this, tax should also be clarified so that LGUs with large companies should pay their taxes directly to the host LGU and not in their mother unit in another part of the country,” he added.
He gave as example the case of the call centers which operate in Baguio City but pay their taxes to the national government in their head offices in Makati City.
He also cited the case of his home city which hosts a bottling plant for a major beer brand but the taxes are paid in the nearby marketing office of the beverage company.
“The LGU which benefits from this arrangement is Pasig City but it is in Valenzuela where the workers are given medical care,” he stressed.
He added the IRA law must give the equitable revenues from the national government so this situation could be addressed. (PNA)