Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
First Regular Session

451

HOUSE BILL NO.

Introduced by Representative Manuel Luis T. Lopez

EXPLANATORY NOTE

The 1987 Philippine Constitution recognizes the right of the local government
units to share in the national taxes. Section 6 Article X of the 1987 Constitution provides:
“{IJocal government units shall have a just share, as determined by law, in the national taxes
which shall be automatically released to them.”

‘Two of the biggest collectors of national taxes are the Bureau of Customs and the
Philippine Ports Authority. Although the users of the port facilities are charged by said
government agencies, the local government units where the port facilities are located do
not receive a portion from the collection.

It must be noted that the port facility users also utilize the local government units’
resources, more specifically, the access roads leading to the port facilities. Hence, itis only
just to allow the local government units to receive a portion of the collection for the
maintenance and repair of the access roads and for the implementation of other local
projects.

‘This measure, which was first filed in the 17 Congress by this representation and
has been pending with the Committee on Ways and Means since May 29, 2017, seeks to
uphold just share of taxes and prioritize the employment of the residents within the
locality of the port.

In view of the foregoing, the passage of this bill is earnestly sought.

U0,

HON. MANUEL Lf T. LOPEZ
Representative
41° District, City’6fManila


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL no. 451

Introduced by Representative Manuel Luis T. Lopez

AN ACT
IMPLEMENTING THE CONSTITUTIONAL MANDATE OF JUST SHARE OF TAXES OF
THE LOCAL GOVERNMENT TO INCLUDE DUES IMPOSED BY THE PHILIPPINE PORTS
AUTHORITY AND BUREAU OF CUSTOMS

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

SECTION 1. Short Title. - This Act shall be known as “Local Government Customs Duties
and Port Dues Act of 2019.”

SEC. 2. Declaration of Policy. - \t is hereby declared the policy of the State to recognize
the right of the local government units to have a just share in the national taxes, which
shall be automatically released to them.

The State shall take all appropriate measures to ensure that the local government units
get a just share of all national taxes collected to enable the local government units to
implement their programs and policies for their constituents.

SEC. 3. Definition of Terms. - As used in this Act, the following terms are defined as
follows:

(a) Local Government Units or LGU ~ refer to autonomous regions, provinces,
subprovinces, cities, municipalities and barangays;

() Bureau of Customs or BOC - refers the government entity under the
Department of Finance which has jurisdiction over the assessment and
collection of the lawful revenues from imported articles and all other dues,
fees, charges, fines and penalties accruing under the tariff and customs
laws;

(c) Customs Duties - refers to dues, fees, charges, fines and penalties accruing
under Presidential Decree No. 1464, as amended or other known as the
Tariff and Customs Code;


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(d) Philippine Ports Authority or PPA ~ refers the government entity created
under Presidential Decree No. 505, as amended, which is mandated, among
others, to supervise, control, regulate, construct, maintain, operate, and
provide such facilities or services as are necessary in the ports vested in, or
belonging to the Authority;

(e) Dues - refers to harbor fees, tonnage and wharfage dues, berthing charges,
and port dues imposed under the Tariff and Customs Code which the PPA
has the authority to collect under Presidential Decree No. 505, as amended.

SEC. 4. Share in Bureau of Customs Duties. - The local government unit where the port

facility is located shall, in addition to the internal revenue allotment, have a share of

twenty percent (20%) of the gross collection of customs taxes received by the Bureau of

Customs, through its Collector, from the conduct of activities in ports within the

jurisdiction of a local government unit concerned.

SEC. 5. Share in Philippine Ports Authority Dues. - The local government unit where the

port facility is located shall likewise have a share of twenty percent (20%) of the gross

collection of dues received by the Philippine Ports Authority from the conduct ofactivities
in ports within the jurisdiction of a local government unit concerned.

SEC. 6. Allocation of Bureau of Customs Duties and Philippine Ports Authority Share.
~ The share in the Sections 4 and 5 shall be distributed in the following manner:

(a) Where the port facility is located:
1) Province - Twenty percent (20%);
2) Component City/Municipality Forty-Five percent (45%);
3) Barangay - Thirty-five percent (35%).
Provided, however, that where the port facility is located in two (2) or more
provinces, or in two (2) or more component cities or municipalities or in two (2)
or more barangays, their respective shares shall be computed on the basis of:
1) Population - Seventy percent (70%); and
2) Land area - Thirty percent (30%)

(b) Where the port facility is located in a highly urbanized or independent
component city:

1) City - Sixty-five percent (65%); and

2) Barangay - Thirty-five percent (35%)


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Provided, however, That where the port facility is located in two (2) or more cities,
the allocation of shares shall be based on the formula on population and land area
as specified in paragraph (a) of this Section.

SEC. 7. Remittance of the Share of Local Government Units. - The share of local
government units in the BOC duties and PPA dues shall be remitted in accordance with
Section 286 of the Local Government Code.

SEC. 8. Development and Livelihood Projects. - The proceeds received from the share
of local government units pursuant to Sections 4 and 5 shall be appropriated by their
respective sanggunian to finance the maintenance and repair of the access roads leading
to the port facilities and other local government and livelihood projects.

SEC. 9. Preference to Local Labor. The Pier Owner shall give priority in employment to
qualified personnel in the municipality, city or province where port facilities are located.

SEC. 10. Monitoring. ~ The respective local treasurer of the local government unit
concerned shall be tasked to monitor the remittance of the local government unit's share
in BOC duties and PPA dues.

SEC. 11. Reporting. - The BOC and the PPA shall submit to the President and the Congress
an annual report on the remittance under this Act.

SEC. 12. Amendatory and Repealing Clause. - All laws, decrees, orders, rules and
regulations, ordinances, or any parts thereof, inconsistent herewith are hereby repealed
or modified accordingly.

SEC. 13. Separability Clause. - 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.

SEC. 14. Effectivity Clause. - This Act shall take effect fifteen (15) days after its
publication in at least two (2) national newspapers of general circulation.

Approved,