P1.8 B to pay local gov’t share in economic zones

By Dexter A. See 

LA TRINIDAD, Benguet  – President Aquino said around P1.8 billion will be allotted in next year’s executive budget to pay all local governments, including Baguio City, which were shortchanged in the remittance of their two percent share from the taxes by paid by locators doing business with the Philippine Economic Zone Authority within their jurisdiction since 1995.

 “The national government will settle all its obligations to local governments hosting PEZA locators so that more funds will be downloaded to the host communities to fund the implementation of their priority projects and enhance the delivery of basic services to the people,” Aquino said, when asked on when will the national government settle its P125 million obligation representing its accumulated unremitted share of the local government from the taxes paid by PEZA locators in 2003 and 2004.

According to the President, the allocation of the P1.8 billion in next year’s budget will already address all the national government’s obligations to host local government for hosting economic zones in order for local officials to be able to use such generated funds to bankroll their priority development projects that will have a great impact in the growth of communities in the rural areas.

In the case of the Summer Capital, Aquino said the Bureau of Internal Revenue and the National Treasury were able to iron out the conflicts in their respective figures on the actual amount to be paid by the national government which was reduced to only P85 million from the original P125 million.

Under the PEZA law of 1995, local governments hosting economic zones are entitled to a share of 2 percent out of the total 5 percent of taxes being paid by locators to the national government as per their gross receipts.

 The Chief  Executive explained local governments who believe they are shortchanged in the remittance of their share from the PEZA taxes must file their claims with the Office of the President duly supported by valid certifications from the BIR and the National Treasury indicating the deficiency in the taxes remitted to the host local government so that the Department of Finance could process the immediate release of the deficiency chargeable from the aforesaid fund.

Since his assumption as the country’s 15^th president, President Aquino had repeatedly committed to facilitate the city’s accumulated and unremitted share from the taxes paid by PEZA locators  over the past several years considering that the national government is duty-bound to release whatever is its obligation to local governments in order for the host communities to have enough funds for its various unfunded and unimplemented priority projects and enhance the delivery of basic services, especially to the lower classes of the population.

 “We want to have a clean slate with our obligations to our local governments, thus, we are working hard to determine the causes of the problem on unremitted PEZA shares so that we can implement corrective measures that will guarantee correct remittance to the local governments in the future,” Aquino said, citing that the timely release of the share of local governments from whatever share due them should also be a priority that they will address in the coming months.