Republic of the Philippines 3.0 JUL 2013
HOUSE OF REPRESENTATIVES vo PH

Quezon City popat

16" CONGRESS
First Regula ion

BILL NO. 2040

HOUS

Introduced by REP. EVELINA G.

EXPLANATORY NOTE

This bill is being filed to achieve a more equalized distribution of revenues, especially
since most principal places of business are located in highly urbanized cities in the country like
those in Metro Manila,

‘The current law on local taxation as provided for in the Local Government Code already
recognizes and imposes the situs rule on taxation, however, several amendments must be
proposed. And this is in the area of tax sharing between and among local government units
where the principal place of business, branch or sales outlet, factory, project office, plant or
plantation is located.

A hundred percent share of all sales or transactions to Local Government Units (LGUs) is
proposed so long as such sales or transactions occur in the LGU concerned. This practically
expunges the present thirty percent share of the LGU where the principal place of business is
located.

Itis submitted that with this bill, the constitutional mandate of making LGUs autonomous
and self-sustaining government bodies shall be realized,

Thus, the early passage of this measure is sought.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

16" CONGRESS
First Regular Session

HOUSE BILL NO, _ 204 9

Introduced by REP. EVELINA G, ESCUDERO.

AN ACT
RATIONALIZNG LOCAL TAXATION AMENDING FOR THAT PURPOSE SECTION
150, CHAPTER 1, TITLE ONE, BOOK I] OF REPUBLIC ACT NO. 7160, AS
AMENDED, OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE.

Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:

Section 1. Section 150, Chapter 1, Title One, Book II of Republic Act No. 7160, as

amended, is hereby further amended to read as follows:

“SECTION 150. Situs of the Tax. - (a) For putpos
collection of the taxes under Section 143 of this Code, manufacturers,
assemblers, repackers, brewers, distillers, rectifiers and compounders
of liquor, distilled spirits and wines, millers, producers, exporters,
distributors, dealers, contractors, banks and other
tutions, and other businesses, maintaining or operating
branch or sales outlet, FACTORY, PROJECT OFFICE, PLANT
OR PLANTATION elsewhere shall record the sale in the branch or
sales outlet, FACTORY, PROJECT OFFICE, PLANT OR
PLANTATION making the sale or transaction, and the tax thereon
shall accrue and shall be paid to the municipality where such branch or
sales outlet, FACTORY, PROJECT OFFICE, PLANT OR
PLANTATION is located. In cases where there is no such branch or
sales outlet, FACTORY, PROJECT OFFICE, PLANT OR
PLANTATION in the city or municipality where the sale or
transaction is made, the sale shall be duly recorded in the principal
office and the taxes due shall accrue and shall be paid to such city or
municipality



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[(b) The following sales allocation shall apply to manufacturers, assemblers,
contractors, producers, and exporters with factories, project offices,
plants, and plantations in the pursuit of their business:

(4) Thirty percent (30%) of all sales recorded in the principal office shall be
taxable by the city or municipality where the principal office is
located; and

(5) Seventy percent (70%) of all sales recorded in the principal office shall be
taxable by the city or municipality where the factory, project office,
plant, or plantation is located.

[(©)] (B) In case of a plantation located at a place other than the place where
the factory is located, [said seventy percent (70%)] THE SALE OR
TRANSACTION mentioned [in subparagraph (b) of subsection (2)]
above shall be divided as follows:

(1) Sixty percent (60%) to the city or municipality where the factory is
located; and

(2) Forty percent (40%) to the city or municipality where the plantation is
located

[@] (©) In case where a manufacturer, assembler, producer, exporter or
contractor has two (2) or more factories, project offices, plants, or
plantations located in different localities, the [seventy percent (70%)]
SALE OR TRANSACTION mentioned [in subparagraph (b) of
subsection (2)] above shall be prorated among the localities where the
factories, project offices, plants, and plantations are located in
proportion to their respective volume or production during the period
for which the tax is due.

{(©)] () The foregoing [sales allocation] shall be applied irrespective of
whether or not sales are made in the locality where the factory, project
office, plant or plantation is located.”
See, 2. The Secretaries of the Department of Finance, the Department of Budget
and Management and the Department of the Interior and Local Government, and the Presidents
of the different Ligas shall promulgate the required rules and regulations for the speedy and

effective implementation of this Act.

See. 3. If any provision or part hereof is held invalid or unconstitutional, the

remainder of the law or the provision not otherwise affected shall remain valid and subsisting.

See. 4. All laws, presidential decrees, executive orders, proclamations and/or

administrative regulations which are inconsistent with the provisions of this Act are hereby

amended, modified, superseded or repealed accordingly.


1 See. 5, This Act shall take effect fifteen (15) days from its publication in the

2 Official Gazette or at least two newspapers of national circulation.

3 Approved,