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Chiz bats for 100% LGU share in local business tax.

The Aquino government should support moves to amend the situs rule on local business tax in order to help local government units (LGUs) raise their revenues and boost their financial capability to implement their local projects.

Senator Francis "Chiz" Escudero, former chair of the Senate Finance Committee, underscored the need to amend Section 150 of Republic Act No. 7160 or the Local Government Code because this clause is depriving LGUs of their much-needed revenues for a long time.

Section 150 of the Local Government Code of 1991 on situs rule or the taxing jurisdiction rule on local business tax provides that "all sales made in a locality where there is a branch or sales office or warehouse should be recorded in said branch or sales office or warehouse and the local business tax due should be paid to the city or municipality where the same is located."

Escudero, who filed Senate Bill No. 120 or the Rationalizing Local Taxation Act, has been pushing for the amendment since 2012. The measure seeks to give a 100-percent tax share to LGUs so long as such sales or transactions occur in the LGU concerned.

The bill is still pending on first reading before the Senate Committee on Local Government.

"Essentially, we want businesses to pay their local taxes in municipalities where the businesses operate, instead of where their main offices are located. LGUs in effect should have a bigger share in the revenue from these firms," explained Escudero.

"We need to change the situs of taxation because those who earn from those businesses are from the pockets and money of those who live in that particular locality or municipality," he said.

For many years, he said, the Department of Budget and Management (DBM) and the Bureau of Internal Revenue (BIR) had opposed such moves to tamper this provision in the Local Government Code.

According to the senator, the rule has become a contentious issue due to the multiple jurisdictions spanned by most business operations with their branches, sales outlets, factories, project offices and plantations or plants.

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Title Annotation:Metro
Publication:Manila Bulletin
Date:Sep 11, 2015
Words:345
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