_FIFTEENTH CONGRESS OF THE )
~~~ REPUBLIC OF THE PHILIPPINES )
Second Regular Session )

HOUSE of REPRESENTATIVES
House Bill No._55S8

Introduced by: MA. THERESA B. BONOAN-DAVII
4% District, City of Manila

EXPLANATORY NOTE

The bill seeks to amend Section 290 of the Local Government Code which states that the
internal revenue collections from the national wealth through mining, forestry, and fishery activities
in the form of taxes, royalties, fees, charges, interests, fines or shares of the central government in
any co-production, joint venture or production sharing agreements over such activities are to be
shared with the local governments havir tion and
development of the national wealth.

Under the law, local government units are entitled to 40% of the gross collections derived by
the national government from the utilization of and development of the national wealth by private
persons or entities.

While private persons or entities pay their taxes to the national government pursuant to
existing laws, the national government has not fully remitted to the local government units their
share in the national wealth taxes. It is thus very unfortunate that LGUs have always been
shortchanged of their share from the revenues, taxes, charges or fees paid by private persons or
entities to the national government.

This is compounded by the fact that although section 286 of the same Code mandates the
automatic release of the internal revenue allotments to LGUs, there is no similar provision as regards
shares in the national wealth.

‘What further complicate this problem are the sites of payment of taxes by the private persons
or entities. Some private persons and entities hold their principal offices in urban centers while their
bases of operations are somewhere else. Under the Corporation Code, private persons or entities
may pay their taxes to the national government at the place where they hold their principal offices,
thereby depriving the host local government units the first crack at their shares in the said revenues.

There is therefore an urgent necessity to amend section 290 of the Local Government Code in
‘order to mandate persons engaged in the utilization and development of national wealth to pay
directly to the LGUs and the national government their shares in the national wealth taxes.

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

YY
MA. THERESA BONOAN-DAVID
4th District, City of Manila


FIFTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )
Second Regular Session )

HOUSE of REPRESENTATIVES
House Bill No.__5E8§

Introduced by: MA. THERESA B. BONOAN-DAVID
4% District, City of Manila

AN ACT
AMENDING SECTION 290 OF REPUBLIC ACT NO. 7160,
OTHERWISE KNOWN AS
THE LOCAL GOVERNMENT CODE OF 1991

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

SECTION 1. Section 290 of Republic Act No. 7160, entitled the "Local Government
Code of 1991" is hereby amended to read as follows:

"Sec. 290. Amount of Share of Local Government Units. - Local
government units shall, in addition to the internal revenue
allotment, have a share of forty percent (40%) of the gross
collection derived by the national government from the
preceding fiscal year from mining taxes, royalties, forestry
and fishery charges, and such other taxes, fees, or charges,
including related surcharges, interest, or fines, and from its
share in any co-production, joint venture or production
sharing agreement in the utilization and development of the
national wealth within their territorial jurisdiction [.]:
PROVIDED, THAT PERSONS, NATURAL OR JURIDICAL,
ENGAGED IN THE UTILIZATION AND DEVELOPMENT
OF THE NATIONAL WEALTH, SHALL PAY DIRECTLY
THE ABOVE-MENTIONED FORTY PERCENT (40%) OF
THEIR NATIONAL WEALTH TAXES TO THE HOST
LOCAL GOVERNMENT UNITS AND THE REMAINING
SIXTY PERCENT (60%) TO THE NATIONAL
GOVERNMENT.”


SECTION 2. Repealing Clause. - All laws, presidential decrees, executive orders,
proclamations, rules and regulations, or parts thereof which are inconsistent with the
provisions of this Act are hereby repealed or modified accordingly.

SECTION 3. Effectivity Clause. - This Act shall take effect fifteen (15) days from its
publication in the Official Gazette or in at least two (2) newspapers of general.

. Approved.