JULY 26, 2012

NR # 2812

Revenue generating measure to increase LGUs collection

A lawmaker is urging the House Committee on Local Government to hasten consideration of a revenue generating measure that would increase the tax collection of the local government units (LGUs). Rep. Mel Senen Sarmiento (1st District, Western Samar), author of House Bill 1489, said the measure seeks to eliminate the leakages in local tax collections resulting from local tax exemptions enjoyed by government corporations and business entities covered by investment promotion laws. The bill seeks to amend the Book 11 of the Republic Act 7160 or the Local Governmant Code. After 17 years, the Local Government Code needs some reconfiguring to address the needs of the time, especially its capability to generate revenue by developing new businesses, creating new jobs and revitalizing communities in line with national development goals, Sarmiento said. Sarmiento said some provisions of the code have been overtaken by changes in the countrys economy. These changes include increases in the national inflation rate which has reduced the vatue of tax collections and the rise of new business structures which have not existed when the law was first passed, Sarmiento said. Likewise, the various reviews have also uncovered complications in the implementation of the law which could be addressed by simplifying the process involved or by further defining the relationship of LGUs vis--vis other central government agencies like the Bureau of Internal Revenue, Sarmiento added. Sarmiento said the bill will increase the ceiling on the tax of the transfer of real property ownership from 0.5% to 2% which could increase the annual collection from P1.3 billion to P5.2 billion. The bill provides for an increase on the professional tax from P300 to P1,200 which could increase the annual collection from P155-million to P620-million and the annual fixed tax for delivery trucks or vans of manufacturers or producers from P500 to P1,500 which could increase the annual take from P90 million to P270million; The bill will simplify the business tax to a single rate of 2.5% of gross sales or receipts which could increase the annual take from P21.8 billion to P54.5 billion.

JULY 26, 2012

NR # 2812

Under the bill, the community tax will be increased from P5 to P30 also increasing the annual revenue from P954-million to P1.9-billion. There will be an increase on ad valorem tax on idle lands from a ceiling of more than 5% to 10% which could raise the LGU's annual take from P12.8-million to P25.6 million. The other features of the bill include additional levy of 0.5% for the Special Education Fund (SEF) which could result in an increase from P2-billion to P4-billion; inclusion of the Spas, Karaoke bars, country and sports clubs in the list of businesses subject to local business taxes; requiring the BIR to share tax information with local government units and removing the local tax exemptions of government corporations and businesses qualifying for investment incentives. (30) dpt