Republic of the Philippines
HOUSE OF REFRESENTATTVES
Ouezon Cfty
NINETEENTH CONGRESS
First Regular Session
HousE.`BILLNo.8788
DRAEE¥D2o&
Introduced by HONORABLE LUIS N. CAMPOS, ]R
E}erlANATOR¥ NOTE
Enshrined  withn  the Constitution  is  our policy  and  directive  on  local  autonomy.
Article 11, Section 25 states that
"The State shall ensure the autonomy of local governments".
Section 2 of Article X that governs Local Governments states that:
"The territorial and pchtical subdivisions shall enjoy local autonomy".
The Local Government Code follows suit when it declared that pohtical subdivisions
such as cities "shall enjoy genuine and meaningful local autonomy to enable them to attain
their fullest development as self-reliant communities and make them more effective partners
in  the  attainment of national goals.  Toward  this end,  the State shall provide for  a more
responsive  and  accountable  local  government  stnicture  instituted  through  a  system  of
decentralization  whereby  local  government  units  shall  be  given  more  powers,  authority,
responsibflities, and resounes".
In line with the foregoing principles it is the hope of this bill that by exempting local
government units from all foms Of taxation,  it provides them with more resources to be
utilized for the benefit of their constituents and for their development and growth. This would
also simplify the transactions between the national and local government and reduce red tape
which prolong national and local government interactions.
While the  idea  may  seem  revolutionary,  it  must be  kept in  rfund  that non-profit
institutions are exempt from certain taxes withn our jurisdiction. This bin seeks to go beyond
current boundaries in the search of further development and growth.
In consideration of the foregoing premises, the approval of this bill is earnestly sought.
-
LUIS N. C~OS, ]R.


Repubhic of the Philippines
HouSE oF REPRESEr`ITATlvES
Quezon Crty
NINEi'EEr`rrll CoNGRESS
First Regular Session
HousE-BILLNo.8788
Introduced by HONORABLE LUIS N. CAMPOS, |R.
AN ACT E{EMprlNG ALL LOCAL GovERNMEr`IT uNITs FROM pA¥ING ALL
FORMS 0F TAXATION
Be it erected by the Senate a:nd the House Of Representalves in Corngress assembled:
SECTION 1.   DccJflr¢fl.ow a/ Po!I.ey - It is the State's pohicy to promote local autonomy
and to accelerate economic and social growth of lcx:al government units.
SBC.    2~    Exemption of li]cal Goverrmeiit unds f ron paying any f orm of taxahon -    Am
Local  Government  Units  (LGUs)  from  barangays,  municipalities,  cities,  to  provinces  are
hereby exempted from paying any form taxation to the national government whether such
activity was for profit or non-profit in nature provided that such tax was charged against the
local government unit.
Tis shall not be interpreted to prevent the transmission of taxes collected by the LGUs
that are due to the national government. Taxes such as but are not lindfed to corporate tax,
income  tax,  and  value  added  tax  incuned  by  a  noni5ovemment nonexempt person  or
institution.
SEC.   3.   rr7!p!cr#enft+!g Rttfes and Rcgrt!¢tr.ofrs - The Secretary of Finance in coordination
with the Bureau of Intemal Revenue shall issue the necessary rules and regulations to put into
effect the purpose of this Act.
SEC.   4.    Rcpeazz.7zg  aousc  - All  laws,  decrees,  orders,  rules  and  regulation  or  part
thereof inconsistent with this Act are hereby repealed or amended accordingly.
SEC.   5.   Scporobe.Jt.fy chat{sc - If any part or provision of this Act is declared invahd or
unconstitutionaL the other parts thereof not affected thereby shall remain valid.
SEC.  6.   £#gcti.an.fry C!owsc - This Act shall take effect fifteen (15) days upon completion
of its pubrication in at least two (2) national newspapers of general circulation.
Approved,