Cosalan files bill to compel firms to pay taxes to LGUs

By Dexter A. See 

LA TRINIDAD, Benguet - A lawmaker wants companies developing and utilizing the national wealth to directly remit to the host local governments their 40 percent share from the national wealth tax.

Rep. Ronald M. Cosalan authored House Bill (HB) 910 known as “Direct Remittance Law” in order to allow local governments hosting mining, power generation among others to immediately submit to the barangay, city, municipal and provincial treasury offices their respective shares from the operation of the said companies.

The bill seeks to amend Section 293 Chapter 2, Title 3 of Republic Act No. 7160 otherwise known as the Local Government code of the Philippines which explicitly mandates companies developing the country’s national wealth to directly submit to the national treasury the 100 percent national wealth tax, before the national government gives back the 40 percent share of the host local governments upon the discretion of the Department of Budget and Management (DBM)

“The current practice now is that host local governments have to literally beg for their 40 percent share from the national wealth tax to be released. In the meantime, development and other priority projects for the host communities have to be deferred until such time such share is released,” Cosalan stressed.

He cited host local governments are confronted with a situation wherein the national wealth of a host community being exploited of its natural wealth but without the host community immediately enjoying the benefits of such development and utilization of the wealth.

“This bill seeks to correct this inequity by mandating the direct remittance of the share from the development of the national wealth to the local government unit concerned,” Cosalan said.

He explained immediate passage of the measure will enable host local governments to undertake its priority projects for the benefit of the people living in the said places.

Under the Local Government code, the 40 percent share of the host local governments shall be allocated to the province which is guaranteed 20 percent, host component city or municipality will receive 45 percent and the host barangay shall get 35 percent. In cases where the national wealth is located in two or more local governments, their share shall be computed based on land area that will make up 70 percent and population accounting for 30 percent.

Cosalan said provincial, municipal and barangay officials from local government units hosting mining and power generation companies have a difficulty of getting their shares from the national wealth tax because the DBM requires them to submit their list of priority projects that will be funded by the said share instead of giving the local governments autonomy to be the ones to allocate their share based on their priority needs.

If amended, Section 293 shall provide “any person, whether natural or juridical, including government-owned or controlled corporation, engaged in the development and utilization of the national wealth, shall directly remit the 40 percent share of local government units as provided in Section 292 hereof, to the provincial, city, municipal or barangay treasurer concerned within five days after the end of its quarter.