House committees approve Bangsamoro tax, funding

Angela Casauay
House committees approve Bangsamoro tax, funding
The proposed Bangsamoro parliament is expected to get P36.8 billion in its first year. The bill moves to the House of Representatives plenary for approval.

MANILA, Philippines – The proposed law creating a new autonomous region in Mindanao formally moves to plenary after its tax and budget provisions were approved at a committee level on Tuesday, May 26. 

The committee on ways and means, and committee on appropriations of the House of Representatives conducted back-to-back hearings Tuesday as lawmakers raced to beat the deadline to pass the proposed Bangsamoro basic law before Congress adjourns session on June 11. (READ: Bangsamoro bill hurdles House committee

Except for minor amendments, the two committee retained the original tax and funding provisions of the bill. (DOCUMENT: Bangsamoro bill as approved in House committee)

Marikina Representative Romero Quimbo, chairperson of the House ways and means committee, said 95% of the tax provisions were already granted to the present Autonomous Region in Muslim Mindanao.

Under the proposed Bangsamoro bill, new taxes that were devolved to the Bangsamoro include: capital gains on real properties, estate tax, donors tax and documentary stamp tax. 

These new additional taxes will amount to an additional P41 million for the Bangsamoro autonomous region, based on figures as of 2014: 

  • Capital gains on real properties – P22 million
  • Estate tax – P1.1 million
  • Donors tax – P907,000,000
  • Documentary stamp tax – P17 million

All other taxes that were levied to the Bangsamoro government in Article XII (Fiscal Autonomy) Section 9 of the proposed Basic Law for the Bangsamoro Autonomous Region were already under the ARMM. However, some of them were never implemented, including the income tax on banks and other financial institutions and registration fees of vessels.

The proposed law also increased the share of the autonomous region in income taxes collected in the region, as well as mineral resources from 70% to 75% – as agreed upon in the wealth-sharing aspects of the peace deal between rebel group Moro Islamic Liberation Front (MILF) and the government. 

“Some of our colleagues feel a huge amount is being given when in fact it’s already being given except for the 4 new taxes,” Quimbo said. 

Quimbo said the additional P41 million from new devolved taxes, as well as the additional 5% share in taxes from income tax and mineral resources that were awarded to the Bangsamoro would not have a significant impact if it would be compared to the “billions” that are spent for armed forces operations in the area. 

Not P70 billion

Under the Bangsamoro bill, the envisioned autonomous government will enjoy automatic appropriations similar to the internal revenue allotment for local government units. This is to ensure that it will have enough resources to use as it enjoys more powers. 

The proposed block grant will be 4% of the 60% of the net internal revenue that goes to the national government. The remaining 40% are spread out across provinces and cities and will remain untouched. 

According to the computation of the Department of Budget and Management provided to the committee, the Bangsamoro government will get a P26.8-billion block grant in 2016. It will be up to the Bangsamoro, which will be parliamentary in form, to legislate how the funds will be allocated. 

It will also receive P7 billion worth of Special Development Fund and a P1 billion transition fund as the ARMM is replaced by the Bangsamoro. The new region is also expected to get another P2 billlion for its share in national tax collected in the Bangsamoro. 

All in all, the Bangsamoro government is expected to get P36.8 billion in its first year of operation – not the P70 billion figure that earlier circulated in various news reports.

An earlier estimate of P70 billion included the IRA of LGUs, a misconception since the amount would not be controlled by the autonomous regional government. 

The IRA of local government units in the Bangsamoro is expected to amount to a total of P19.8 billion. 

While the block grant will be automatically appropriated to the Bangsamoro every year, the House appropriations committee chairperson, Representative Isidro Ungab said they have made it clear in the bill that the other amounts, including the Special Development Fund and the Transition Fund, will be legislated and included in the General Appropriations Act. 

Lawmakers have also made it clear in the law that only budget preparation and appropriation will be under the jurisdiction of the Bangsamoro. Ungab said national laws will always prevail during budget execution and accountability, he added. 

Ungab also debunked claims that the national government is giving too much to the new region. “It is almost the same as what the ARMM is receiving now,” he said. The ARMM has a P24.7 billion budget for 2015 under the General Appropriations Act.   

The proposed Bangsamoro basic law seeks to create an enhanced autonomous region in Muslim Mindanao with greater resources and powers in a bid to end close to 5 decades of armed conflict in the South. – Rappler.com

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