# Republic Act No. 6766/Article XIII

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Source: Official Gazette. Vol. 85, No. 48. Manila. National Printing Office. 1989. pp. 7628–7630.
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Article XIII
FISCAL AUTONOMY
Section 1. The Regional Government shall have the power to create its own sources of revenues and to levy taxes, fees and charges, subject to such guidelines and limitations as the Constitution and this Act may provide, consistent with the basic policy of local autonomy. Such taxes, fees and charges shall accrue exclusively to the Autonomous Region.
Sec. 2. In enacting revenue-raising measures, the Cordillera Assembly shall observe the principle of uniformity and equity in taxation and shall not impose confiscatory taxes or fees of any kind. Income taxation, however, shall be solely the concern and prerogative of the National Government.
The Cordillera Assembly shall not revoke or amend, directly or indirectly, any city or municipal ordinance imposing any tax or fee on purely local business.
No tax, impost or assessment shall be imposed or charged upon goods or merchandise coming into, going out of, or passing through the Autonomous Region to other places of the Philippines, and vice versa.
Sec. 3. All corporations, partnerships, and other business entities directly engaged in business in the Autonomous Region shall pay through the Regional Government that portion of their annual income tax corresponding to the net income generated from business done in the area of autonomy.
All corporations, partnerships or business entities directly engaged in business in the Autonomous Region shall pay their corresponding taxes, fees and charges in the province, city, or municipality where the establishment is doing business regardless of the location of their principal or main offices.
Sec. 4. The sources of revenues of the Autonomous Region shall include, but are not limited to, the following:
(a) Taxes, except income taxes, imposed by the Regional Government;
(b) Fees and charges imposed by the Regional Government;
(c) Appropriations, internal revenue allotment and other budgetary aids from the National Government;
(d) Shares in revenues generated from the operations of public utilities within the Autonomous Region; and
(e) Block grants derived from economic agreements or conventions authorized by the Autonomous Region, donations, endowments, foreign assistance, and other forms of aid, subject to the Constitution and national policies.
Sec. 5. The total collections of a province or city from national internal revenue taxes, fees and charges as well as taxes, fees and charges imposed on natural resources accruing as income to the National Government, shall be distributed as follows:
(a) Thirty percent (30%) to the province or city;
(b) Thirty percent (30%) share to the Regional Government; and
(c) Forty percent (40%) to the National Government.
The thirty percent (30%) share of the province shall be distributed equally as follows: ten percent (10%) to the province, ten percent (10%) to the municipality and ten percent (10%) to the barangay.
The thirty percent (30%) share of the city shall be distributed as follows: twenty percent (20%) to the city and ten percent (10%) to the barangay.
The province or city concerned shall automatically retain its share and remit the seventy percent (70%) to the Regional Government, which shall, after deducting its share, remit the balance to the National Government on a monthly basis.
The remittance procedure within the Autonomous Region shall be in accordance with the rules and regulations promulgated by the Regional Government, and remittances to the National Government, by the rules and regulations promulgated by the Department of Finance.
Sec. 6. Subject to the Constitution and national policies, the Regional Government shall evolve a system of economic agreements or trade compacts to generate block grants for regional investments and improvements of regional economic structures. These economic agreements shall be authorized by regional legislation or by executive agreement. Pursuant to specific recommendations from the Regional Planning and Development Board, the Regional Government shall assist local government units in their requirements for counterpart funds for foreign-assisted projects.
Sec. 7. Subject to existing national laws, donations or grants to the Autonomous Region exclusively to finance, to provide for, or to be used in undertaking projects in education, health, youth and sports development, human settlement, science and culture, and in economic development shall be deductible in full in determining the taxable income of the donor or grantor.
Sec. 8. The Cordillera Assembly shall have the power to grant tax incentives or exemption on taxes which the Autonomous Region is empowered under this Act to impose. A law granting tax exemption shall only be passed with the concurrence of a majority of all the Members of the Cordillera Assembly.
Sec. 9. Foreign loans may be contracted only in accordance with the provisions of the Constitution and national laws: Provided, That the Cordillera Governor may contract domestic loans subject to the approval of the Cordillera Assembly.
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