Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTE! ‘H CONGRES
First Regular Session

HOUSE BILL No, 8867

Introduced by REP, EVELINA G, ESCUDERO

EXPLANATORY NOTE
This bill seeks to achieve fairness in local taxation, especially in treating the situs of the tax

Albeit, the current law on local taxation as provided for in the Local Government Code
already recognizes and imposes the situs rule on taxation, it is submitted that further modification
be had, And this is in the area of tax sharing between and among local government units where the
principal place of business, branch or sales outlet, factory, project office, plant or plantation is
located.

A hundred percent share of all sales or transactions to Local Government Units (LGUs) is
proposed so long as such sales or transactions occur in the LGU concerned. This practically
expunges the present thirty percent share of the LGU where the principal place of busines
located.

This proposal is anchored on a more equalized distribution of revenues, especially since
most principal places of business are located in highly urbanized cities in the country like those in
Metro Manila.

Moreover, this bill is in consonance with the constitutional mandate of making LGUs
autonomous and self-sustaining government bodies.

Thus, the early passage of this measure is sought

__ Atdit)

VELINA

YCUDERO


Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

'TH CONGRESS
Regular Session

HOUSE BILL No, 8867

Introduced by REP, EVELINA G. ESCUDERO

AN ACT
RATIONALIZNG LOCAL TAXATION AMENDING FOR THAT PURPOSE SECTION
150, CHAPTER 1, TITLE ONE, BOOK II OF REPUBLIC ACT NO. 7160, AS AMENDED,
OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE

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

SECTION 1. Section 150, Chapter 1, Title One, Book II of Republic Act No. 7160. as
amended, is hereby further amended to read as follows:

“SECTION 150. Situs of the Tax. - (a) For purposes of collection
of the taxes under Section 143 of this Code, manufacturers, assemblers,
repackers, brewers, distillers, rectifiers and compounders of liquor
distilled spirits and wines, millers, producers, exporters, wholesalers,
distributors, dealers, contractors, banks and other financial institutions,
and other businesses, maintaining or operating branch or sales outlet,
FACTORY, PROJECT OFFICE, PLANT OR PLANTATION
elsewhere shall record the sale in the branch or sales outlet, FACTORY,
PROJECT OFFICE, PLANT OR PLANTATION making the sale or
transaction, and the tax thereon shall accrue and shall be paid to the
municipality where such branch or sales outlet, FACTORY, PRO.
OFFICE, PLANT OR PLANTATION is located. In cases where there
is no such branch or sales outlel, FACTORY, PROJECT OFFICE,
PLANT OR PLANTATION in the city or municipality where the sale
or transaction is made, the sale shall be duly recorded in the principal
office and the taxes due shall accrue and shall be paid to such city or
municipality

[(b) ‘The following sales allocation shall apply to manufacturers, assemblers,
contractors. producers, and exporters with factories, project offi
plants, and plantations in the pursuit of their business



(4) Thirty percent (30%) of all sales recorded in the principal office shall be
taxable by the city or municipality where the principal office is located;
and

(5) Seventy percent (70%) of all sales recorded in the principal office shall be
taxable by the city or municipality where the factory, project office,
plant, or plantation is located. |

[(c)] (B) In case of a plantation located at a place other than the place where the
factory is located, [said seventy percent (70%) THE SALE OR
TRANSACTION mentioned [in subparagraph (b) of subsection (2)]
above shall be divided as follows:

(1) Sixty percent (60%) to the city or municipality where the factory is located;
and

(2) Forty percent (40%) to the city or municipality where the plantation is
located

{(@] (C) In case where a manufacturer, assembler, producer, exporter ot
contractor has two (2) or more factories, project offices, plants, ot
plantations located in different localities, the [seventy percent (70%)]
SALE OR TRANSACTION mentioned [in subparagraph (b) of
subsection (2)] above shall be prorated among the localities where the
factories, project offices, plants, and plantations are located in proportion
to their respective volume or production during the period for which the
tax is due

{(€)] (D) The foregoing [sales allocation] shall be applied irrespective of whether
or not sales are made in the locality where the factory, project office,
plant or plantation is located.”

SEC. 2. The Secretaries of the Department of Finance, the Department of Budget and
Management and the Department of the Interior and Local Government, and the Presidents of the
different Ligas shall promulgate the required rules and regulations for the speedy and effective
implementation of this Act.

SI 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. 4, All. laws, presidential decrees, executive orders, proclamations and/or
administrative regulations which are inconsistent with the provisions of this Act are hereby
amended, modified, superseded or repealed accordingly.

SEC. 5. This Act shall take effect fifteen (15) days from its publication in the Official
Gazette or at least two newspapers of national circulation.

Approved,