EIGHTEENTH CONGRESS OF THE 
]
REPUBLIC OF THE PHILIPPINES 
]
First Regular Session 
]
SENATE
S. No. 
881
ft i.)i fc*.1 r. tri-p
•19 
AUG-8  
P4 51
Introduced by SENATOR SHERWIN T. GATCHALIAN
AN ACT
AMENDING SECTION 150 OF REPUBLIC ACT NO. 7160, OTHERWISE 
KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991, FOR THE PURPOSE 
OF STRENGTHENING ITS ENFORCEMENT AND IMPLEMENTATION
EXPLANATORY NOTE
The power to tax "is an attribute of sovereignty," and as such, inheres in the 
State. Such, however, is not true for provinces, cities, municipalities and barangays 
as they are not the sovereign; rather, they are mere "territorial and political 
subdivisions of the Republic of the Philippines."1
However, it is constitutionally provided that each local government unit shall 
have the power to create its own sources of revenues and to levy taxes, fees, and 
charges subject to such guidelines and limitations as the Congress may provide, 
consistent with the basic policy of local autonomy. Such taxes, fees, and charges 
shall accrue exclusively to the local governments.2
The Local Government Code of 1991 specifically provides that municipalities, 
cities and provinces may impose taxes on business. This is where Situs of taxation 
comes in. While the proportionate tax sharing of the local government units is clear, 
enforcement among LGUs for Intra-revenue sharing has been indistinguishable 
because of improper monitoring and dubious submissions of receipts, which at most 
times is the trick utilized by enterprising businesses to circumvent this provision.
This measure therefore seeks to strengthen the enforcement of Section 150 
of the Local Government Code of 1991 by requiring taxpayers to submit certain 
reports and documentary requirements before they are issued business permits and
1 http://www.lawphil.net/judjuris/juri2015/jul2015/gr_l 87631 2015.html
2 Section 5, Article X of the 1987 Constitution.


other applicable licenses or clearances that are necessary in their business 
operations.
In view of the foregoing, the passage of this bill is earnestly sought.


EIGHTEENTH CONGRESS OF THE 
]
REPUBLIC OF THE PHILIPPINES 
]
First Regular Session 
]
SENATE 
S. No.
:1a
of f:jr 
r. tcvp
‘19 
AUG -8  
P4 51
Introduced by SENATOR SHERWIN T. GATCHALIAN
AN ACT
AMENDING SECTION 150 OF REPUBLIC ACT NO. 7160, OTHERWISE 
KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991, FOR THE PURPOSE 
OF STRENGTHENING ITS ENFORCEMENT AND IMPLEMENTATION
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Be it enacted by the Senate and the House o f Representatives o f the Philippines in 
Congress assembled:
SECTION. 1. Section 150 of Republic Act No. 7160, otherwise known as the 
Local Government Code of 1991, is hereby amended to read as follows:
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Section 150. Situs o f 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 elsewhere shall record the sale in the 
branch or sales outlet making the sale or transaction, and the tax 
thereon shall accrue and shall be paid to the municipality where such 
branch or sales outlet is located. In cases where there is no such branch 
or sales outlet 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 
offices, plants, and plantations in the pursuit of their business:


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(1) 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
(2) 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) In case of a plantation located at a place other than the place where 
the factory is located, said seventy percent (70%) 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.
(d) In cases where a manufacturer, assembler, producer, exporter or 
contractor has two (2) or more factories, project offices, plants, or 
plantations located in different localities, the seventy percent (70%) 
sales allocation 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 volumes of production during the period for which the tax is 
due.
(e) 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.
(F) FOR THE PROPER ENFORCEMENT OF THIS PROVISION, THE 
TAXPAYERS MENTIONED HEREIN SHALL BE REQUIRED TO 
SUBMIT A SCHEDULE OF THEIR TOTAL SALES OR TOTAL 
REVENUES 
AND 
UNAUDITED 
CONSOLIDATED 
FINANCIAL 
STATEMENTS FOR THE PRECEDING FISCAL YEAR WITHIN 
THIRTY (30) BUSINESS DAYS FROM THE CLOSE OF THE FISCAL 
YEAR TO THE LOCAL GOVERNMENT UNIT WHERE THEIR 
PRINCIPAL 
OFFICE, 
BRANCH, 
SALES 
OFFICE, 
FACTORY, 
WAREHOUSE, OR PLANTATION IS LOCATED, AS THE CASE MAY 
BE.
THE PERCENTAGE OF THE TAX PAYABLE IN A PARTICULAR 
LOCALITY SHALL BE BASED ON THE TOTAL SALES OR TOTAL 
REVENUES RECORDED IN ACCORDANCE WITH THE RULES 
SPECIFIED IN THIS SECTION.


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THE 
TAXPAYERS 
MENTIONED 
HEREIN 
SHALL 
HAVE 
THE 
OBLIGATION TO PRESENT THEIR TOTAL SALES OR TOTAL 
REVENUES AND THEIR UNAUDITED CONSOLIDATED FINANCIAL 
STATEMENTS AS A CONDITION PRECEDENT TO THE ISSUANCE 
OR RENEWAL OF BUSINESS PERMITS THAT ARE NECESSARY 
FOR THEIR INITIAL OR CONTINUING OPERATIONS. IN THE 
CASE 
OF 
INITIAL 
OPERATIONS, 
THE TAXPAYERS 
SHALL 
PRESENT THEIR 
FORECASTED 
CONSOLIDATED 
FINANCIAL 
STATEMENTS FOR THE COMING FISCAL YEAR.
FOR PURPOSES OF THE REQUIREMENT IMPOSED HEREIN, A 
FISCAL YEAR SHALL MEAN THE CALENDAR YEAR OR ANY 12- 
MONTH PERIOD ENDING ON THE LAST DAY OF ANY MONTH 
OTHER THAN DECEMBER, WHICH THE TAXPAYER FOLLOWS. 
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS SHALL 
AT 
ALL 
TIMES 
COMPLY 
WITH 
GENERALLY 
ACCEPTED 
ACCOUNTING PRINCIPLES.
SEC. 2. S e p a ra b ility Clause. - Should any part of this Act be declared 
unconstitutional, the rest of the provisions of this Act shall continue to be in effect 
and subsisting.
SEC. 3. R epealing Clause. - The provisions of other laws, decrees, 
executive orders, rules and regulations inconsistent with this Act are hereby 
repealed, amended, or modified accordingly.
SEC. 4. E ffectivlty. - This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette and/or in at least two (2) national newspapers in 
general circulation.
Approved,