SEVENTEENTH CONGRESS OF THE 
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REPUBLIC OF THE PHILIPPINES 
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Second R eg u lar S ession 
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SENATE
S. B. No. ^ 5 0 9
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’17 
JUL25 P2:39
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In tro d u ced  by SENATOR SHERWIN T. GATCHALIAN
AN ACT
AMENDING SECTION 150 OF REPUBLIC ACT NO. 7160, OTHERWISE 
KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991, FOR THE 
PURPOSE OF STRENGTHENING ITS ENFORCEMENT AND
IMPLEMENTATION
EXPLANATORY NOTE
The power to tax "is an attribute of sovereignty," and as such, inheres 
in the State. Such, however, is not true for provinces, cities, m unicipalities 
and barangays as they are not the sovereign; rather, they are mere 
"territorial and political subdivisions of the Republic of the Philippines."1
However, it is constitutionally provided th at each local government 
unit shall have the power to create its own sources of revenues and to levy 
taxes, fees, and charges subject to such guidelines and lim itations as the 
Congress may provide, consistent with the basic policy of local autonom y. 
Such taxes, fees, and charges shall accrue exclusively to the local 
governm ents.2
The Local Government Code of 1991 specifically provides th at 
m unicipalities, cities and provinces may impose taxes on business. This is 
where Situs of taxation comes in. While the proportionate tax sharing of the 
local government units is clear, enforcem ent am ong LGUs for intra-revenue 
sharing has been indistinguishable because of im proper m onitoring and 
dubious subm issions of receipts, which at m ost tim es is the trick utilized by 
enterprising businesses to circum vent this provision.
This m easure therefore seeks to strengthen the enforcem ent of Section 
150 of the Local Government Code of 1991 by requiring taxpayers to subm it
1 http;//www.lawphil.net/judjuris/juri2015/jul2015/gr_l 8763 l_2015.html
2 Section 5, Article X o f the 1987 Constitution.


certain reports and docum entary requirem ents before they are issued 
business perm its and other applicable licenses or clearances th at are 
necessary in their business operations.
In view of the foregoing, the passage of this bill is earnestly sought.
s h e r w iiT t . g a t
■LIAN


SEVENTEENTH CONGRESS OF THE 
]
REPUBLIC OF THE PHILIPPINES 
]
Second R eg u lar S ession 
]
lO ffirr lit t h r t i i i r p
■17 
JUL25 P2 39
SENATE 
RECEivLUb':
s. B. no.1509
In tro d u ced  by SENATOR SHERWIN T. GATCHALIAN
AN ACT
AMENDING SECTION 150 OF REPUBLIC ACT NO. 7160, OTHERWISE 
KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991, FOR THE 
PURPOSE OF STRENGTHENING ITS ENFORCEMENT AND
IMPLEMENTATION
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Be it enacted by the Senate and the House of Representatives of the Philippines 
in Congress assembled:
SECTION. 1. Section 150 of Republic Act No. 7160, otherwise known 
as the Local Government Code of 1991, is hereby am ended to read as follows:
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S ection 150. Situs of the Tax. -
(a) For purposes of collection of the taxes under Section 143 of this 
Code, m anufacturers, assem blers, repackers, brewers, distillers, 
rectifiers and com pounders of liquor, distilled spirits and wines, 
millers, producers, exporters, wholesalers, distributors, dealers, 
contractors, banks and other financial institutions, and other 
businesses, m aintaining or operating branch or sales outlet 
elsewhere shall record the sale in the branch or sales outlet m aking 
the sale or transaction, and the tax thereon shall accrue and shall 
be paid to the m unicipality where such branch or sales outlet is 
located. In cases where there is no such branch or sales outlet in 
the city or m unicipality where the sale or transaction is m ade, the 
sale shall be duly recorded in the principal office and the taxes due 
shcill accrue and shall be paid to such city or municipality.
(b) The following sales allocation shall apply to m anufacturers, 
assem blers, contractors, producers, and exporters with factories,


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project offices, plants, and plantations in the pursuit of their 
business:
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(1) Thirty percent (30%) of ail sales recorded in the principal 
office shall be taxable by the city or m unicipality where the 
principal office is located; and
(2) Seventy percent (70%) of all sales recorded in the principal 
office shall be taxable by the city or m unicipality where the 
factory, project office, plant, or plantation is located.
(c) In case of a plantation located at a place other than the place 
where the factory is located, said seventy percent (70%) mentioned 
in subparagraph (b) of subsection (2) above shall be divided as 
follows:
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(1) Sixty percent (60%) to the city or m unicipality where the 
factory is located; and
(2) Forty percent (40%) to the city or m unicipality where the 
plantation is located.
(d) In cases where a m anufacturer, assem bler, producer, exporter 
or contractor has two (2) or more factories, project offices, plants, 
or plantations located in different localities, the seventy percent 
(70%) sales allocation m entioned in subparagraph (b) of subsection 
(2) above shall be prorated am ong the localities where the factories, 
project offices, plants, and plantations are located in proportion to 
their respective volumes of production during the period for which 
the tax is due.
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(e) The foregoing sales allocation shall be applied irrespective of 
w hether or not sales are m ade in the locality where the factory, 
project office, plant, or plantation is located.
(F) FOR THE PROPER ENFORCEMENT OF THIS PROVISION, 
THE TAXPAYERS MENTIONED HEREIN SHALL BE REQUIRED 
TO SUBMIT A SCHEDULE OF THEIR TOTAL SALES OR TOTAL 
REVENUES AND UNAUDITED CONSOLIDATED FINANCIAL 
STATEMENTS FOR THE PRECEDING FISCAL YEAR WITHIN 
THIRTY (30) BUSINESS DAYS FROM THE CLOSE OF THE 
FISCAL YEAR TO THE LOCAL GOVERNMENT UNIT WHERE 
THEIR 
PRINCIPAL 
OFFICE, 
BRANCH, 
SALES 
OFFICE, 
FACTORY, WAREHOUSE, OR PLANTATION IS LOCATED, AS 
THE CASE MAY BE.
THE PERCENTAGE OF THE TAX PAYABLE IN A PARTICULAR 
LOCALITY SHALL BE BASED ON THE TOTAL SALES OR TOTAL


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REVENUES RECORDED IN ACCORDANCE WITH THE RULES 
SPECIFIED IN THIS SECTION.
THE TAXPAYERS MENTIONED HEREIN SHALL HAVE THE 
OBLIGATION TO PRESENT THEIR TOTAL SALES OR TOTAL 
REVENUES 
AND 
THEIR 
UNAUDITED 
CONSOLIDATED 
FINANCIAL STATEMENTS AS A CONDITION PRECEDENT TO 
THE ISSUANCE OR RENEWAL OF BUSINESS PERMITS THAT 
ARE NECESSARY FOR THEIR INITIAL OR CONTINUING 
OPERATIONS. IN THE CASE OF INITIAL OPERATIONS, THE 
TAXPAYERS 
SHALL 
PRESENT 
THEIR 
FORECASTED 
CONSOLIDATED FINANCIAL STATEMENTS FOR THE COMING 
FISCAL YEAR.
FOR PURPOSES OF THE REQUIREMENT IMPOSED HEREIN, A 
FISCAL YEAR SHALL MEAN THE CALENDAR YEAR OR ANY 12- 
MONTH PERIOD ENDING ON THE LAST DAY OF ANY MONTH 
OTHER THAN DECEMBER, WHICH THE TAXPAYER FOLLOWS. 
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS SHALL 
AT ALL TIMES 
COMPLY WITH 
GENERALLY ACCEPTED 
ACCOUNTING PRINCIPLES.
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SEC. 2. S e p a ra b ility  C lause. - Should any part of this Act be declared
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unconstitutional, the rest of the provisions of this Act shall continue to be in
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effect and subsisting.
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SEC. 3. R epealing C lause. - The provisions of other laws, decrees,
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executive orders, rules and regulations inconsistent with this Act are hereby
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repealed, am ended, or modified accordingly.
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SEC. 4. E ffectivity. - This Act shall take effect fifteen (15) days after its
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publication in the Official Gazette a n d /o r in at least two (2) national
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new spapers in general circulation.
Approved,