Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

FIFTEENTH CONGRESS
First Regular Session

House Bit. No._ 1492

Introduced by: REP. MEL SENEN S. SARMIENTO.

EXPLANATORY NOTE

We have always wanted to have access to the records of the Bureau of Internal
Revenue (BIR) for the sake of transparency. Businesses are required by law to file periodic
returns with the BIR, supported by official receipts documenting their gross for the whole
year. This is more transparent than businessmen’s declaration of gross receipts with the LGU.
‘And since the basis for LGU taxation is gross receipts, businessmen are reluctant to declare
accurate figures.

This was remedied by EO 646 allowing LGUs to access BIR files pertaining to gross
receipts. However, as in our case, the RDO requires us to oblige businessmen to register with
the BIR before we can issue them permits as a precondition to our access to their records. It
should be noted that the Local Government Code precludes the cities from: taxing business
whose annual gross receipts do not exceed P50,000.00 hence; they are beyond our control as
to the BIR requirement. Aside from this, the BIR and the LGU operate on different time lines
and deadlines.

The simpler and more effective solution would be to enact the purpose of EO 646 into
law and providing a simple mechanism whereby the LGU jis furnished a copy of the
businessmen's BIR for an accurate tax assessment. This measure will likewise grant the BIR
‘access to the records of the local treasurer- this is in line with the Lateral Attrition Law.

The approval of this bill is therefore earnestly sought.

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Republic of the Philippines
House of Representatives
Constitution Hills, Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 1492

Introduced by: REP. MEL SENEN S. SARMIENTO.

AN ACT
GRANTING LOCAL GOVERNMENT UNITS THE ACCESS TO THE
RECORDS OF REVENUE DISTRICT OFFICE WITH REGARD TO THE TAX
RETURNS OF BUSINESSES FOR A TRANSPARENT TAX ASSESSMENT

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

SECTION 1. Title. This Act shall be known as the “Transparent Business Tax Act of 2010.”

SECTION 2, Declaration of Policy. It shall be the policy of the State to further empower
local government units through decentralization by giving each local government unit the
power to create its own sources of revenues and to levy taxes, fees, and charges. Towards this
end, local government units shall have access to taxpayer information as collected by the

Bureau of Internal Revenue to ensure that covered taxpayers pay the correct local taxes, fees,

and charges, subject to existing laws on disclosure and limited use of such information.

SECTION 3. A new provision in Republic Act No. 8424 or the National Internal Revenue

Code, as amended, is hereby added to read as follows:

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as amended, is further amended to

EC. 244. DISCLOSURE AND INFORMATION SHARING WITH
LOCAL GOVERNMENT UNITS. — PROVINCIAL, CITY, AND
MUNICIPAL TREASURERS OR THEIR) DULY AUTHORIZED
DEPUTIES SHALL BE PROVIDED ACCESS TO THE INFORMATION
AND DISCLOSURES ENUMERATED IN THE PRECEDING SECTIONS
OF THIS ACT FOR THE PURPOSES OF COLLECTING TAXES, FEES,
OR OTHER CHARGES DUE TO IT UNDER REPUBLIC ACT NO. 7160,

OR THE LOCAL GOVERNMENT CODE OF 1991.”

The succeeding provisions of Republic Act No. 8424 or the National Intemal Revenue Code,

as amended, are hereby renumbered.

SECTION 4. Section 270 of Republic Act No. 8424 or the National Internal Revenue Code,

as follows:

“SEC. 270. Unlawful Divulgence of Trade Secrets. - Except as provided in
Section 71 of this Code and Section 26 of Republic Act No. 6388, any officer
or employee of the Bureau of Internal Revenue who divulges to any person or
makes known in any other manner than may be provided by law information
regarding the business, income or estate of any taxpayer, the secrets,
operation, style or work, or apparatus of any manufacturer or producer, ot
confidential information regarding the business of any taxpayer, knowledge of
which was acquired by him in the discharge of his official duties, EXCEPT IN
SHARING SUCH INFORMATION WITH LOCAL GOVERNMENT

TREASURERS AND OTHER OFFICIALS DULY AUTHORIZED TO

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ASSESS AND LEVY TAXES, FEES OR CHARGES UNDER REPUBLIC
ACT NO. 7160 ("LOCAL GOVERNMENT CODE OF 1991"), FOR THE
PURPOSE OF ASCERTAINING, ASSESSING, AND COLLECTING THE
CORRECT AMOUNT OF LOCAL TAXES, FEES OR CHARGES, shall

upon conviction for each act or omission, be punished by a fine of not less

than Fifty thousand pesos (P50,000) but not more than One hundred thousand
pesos (P100,000), or suffer imprisonment of not less than two (2) years but

not more than five (5) years, or both.

SECTION 5. Repealing Clause. ~ All laws, decrees, executive orders, proclamations, rules
and regulations, or parts thereof inconsistent herewith are hereby repealed or modified

accordingly.

SECTION 6. Separability Clause. - If any provision of this Act is held invalid or

‘unconstitutional, the other provisions not affected hereby shall remain valid and subsisting.

SECTION 7. Effectivity Clause. - This Act shall take effect fifteen (15) days after its

publication in at least two (2) national newspapers of general circulation.

Approved,

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