EIGHTEENTH CONGRESS OF THE } 
REPUBLIC OF THE PHILIPPINES 
} 
F irs t R e g u la r S essio n  
}
i ‘ Ci 
.*
•19 JUL 15 TQ :58
S E N A T E
S. B. No.___ 4S4
In tro d u ced  by SENATOR VICENTE C. SOTTO III
AN ACT AMENDING SECTION 150 OF REPUBLIC ACT 7160, OTHERWISE 
KNOWN AS “THE LOCAL GOVERNMENT CODE OF 1991”
EXPLANATORY NOTE
Before the enactm ent of Republic Act No. 7160, otherwise known as “The 
Local Governm ent Code of 1991”, a common com plaint of local governm ent units 
is the practice of perm itting businesses with principal offices in Metro M anila to 
pay their taxes in the latter despite the fact that m ost of their earnings come 
from their operations in the provinces, cities or m unicipalities outside Metro 
Manila.
The Local Government Code of 1991 provided the solution for the foregoing 
grievances. However, from the time of its effectivity on Januai'y 1, 1992, m ost 
local governm ent units outside Metro Manila were left behind by those within 
the m etropolis in term s of providing basic seiwices, development, and economic 
growth.
This bill seeks to address the said com plaints by proposing an am endm ent 
to the Local Government Code of 1991, specifically the provision on the “Situs of 
the Tax” under Section 150.


Under this m easure, the sales lax paym ent allocation applied to 
m anufacturers, assem blers, contractors, producers and exporters with factories, 
project offices, plants, and plantations in the pursuit of their business will be 
am ended. It is proposed that the allocation of sales tax paym ents to the principal 
office be reduced and that of the m unicipality or city where the factoiy, project 
office, plant or plantation is located be increased.
The foregoing proposal will help out the cities and m unicipalities outside 
Metro M anila to cope with their financial and infrastructure needs and to provide 
additional source of funding for improving basic services and thereby attracting 
investm ent and local migration. In this regard, more LGUs can create more job 
opportunities, tourism  and other beneficial program s for their constituents.
In view thereof, earnest approval of this bill is requested.
VICENTE te. SOTTO III


IWII If  11
EIGHTEENTH CONGRESS OF THE } 
REPUBLIC OF THE PHILIPPINES 
} 
F irst R e g u la r S essio n  
}
i9 JUL 15 n,10:58
ar:..'
S E N A T E
S. B. No. 
494
In tro d u ced  by SENATOR VICENTE C. SOTTO III
AN ACT AMENDING SECTION 150 OF REPUBLIC ACT 7160, OTHERWISE 
KNOWN AS “THE LOCAL GOVERNMENT CODE OF 1991”
Be it enacted by the Senate and the House of Representatives of the 
Philippines, in Congress assem bled:
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SECTION 1. Section 150 of Republic Act No. 7160, otherwise known as the
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Local Governm ent Code of 1991, is hereby am ended to read as follows:
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“SEC. 150. Situs of the Tax. - (a) For purposes of collection of the taxes
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under Section 143 of this Code, m anufacturers, assem blers, re-packers,
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brew ers, distillers, rectifiers and com pounders of liquor, distilled spirits
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and wines, millers, producers, exporters, wholesalers, distributors,
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dealers, contractors, banks and other financial institutions, and other
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businesses, m aintaining or operating branch or sales outlet elsewhere
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shall record the sale in the branch or sales outlet m aking the sale or
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transaction, and the tax thereon shall accrue and shall be paid to the
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m unicipality where such branch or sales outlet is located. In cases where
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there is no such branch or sales outlet in the city or m unicipality where
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the sale or transaction is m ade, the sale shall be duly recorded in the
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principal office and the taxes due shall accrue and shall be paid to such
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city or m unicipality,
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(b) The following sales allocation shall apply to m anufacturers, assem blers,
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contractors, producers, and exporters with factories, project offices,
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plants, and plantations in the pursuit of their business:


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(1) [Thirty percent (30%)] TEN PERCENT (10%) of all 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%)] NINETY PERCENT (90%) of all sales 
recorded in the principal office shall be taxable by the city or city 
or m unicipality where the factory 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%)] NINETY PERCENT (90%) 
m entioned 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%)] 
NINETY PERCENT (90%) sales allocation m entioned in subparagraph (b) 
of subseclion (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 plan is located.
SECTION 2. R ep ealin g  C lause.- All laws, executive orders, rules and 
regulations or any part thereof inconsistent herewith are deem ed repealed, 
modified or am ended accordingly.
SECTION 3. S eparability Clause.- In case any provision of this Act is 
declared unconstitutional or invalid, the other provisions hereof which are not 
affected thereby shall continue in full force and effect.
SECTION 4. E ffectivity.- This Act shall take effect fifteen (15) days after 
its publication in two (2) national new spapers of general circulation.
Approved.