ARTICLE IX

SOURCES OF REVENUES AND OTHER FISCAL MATTERS

 

Section 103. To conserve, protect and develop the national patrimony and heritage located in the Cordillera Autonomous Region, and devolved to the region by this Organic Act, and to fund the operations of the Regional Government, the Regional Government shall, in addition to the existing shares of local government units, regional line agencies and other government institutions, have a share of the national taxes which include but not limited to the following:

(a) One percent (1%) of the national Internal Revenue Taxes. The Regional Government shall have a share in the national internal revenue taxes equivalent to one percetn (1%) based on the collection of the third fiscal year preceding the current fiscal year, in addition to the internal revenue allotment shares of the local government units. Eighty percent (80%) of such share shall be appropriated in the annual regional budget for development projects. The internal revenue allotment share of the Regional Government shall be released directly to the Regional Government Treasurer and shall not be subject to any lien or holdback that may be imposed by the national government for whatever purpose.

(b) Forty percent (40%) Share of the National Wealth Tax. The Regional Government shall have a separate forty percent (40%) share of the gross collections in the preceding fiscal year from mining taxes, royalties, environmental services, forestry and fishery charges, energy production charges, and such other taxes, fees and charges, including related surcharges, interests and fines derived from the utilization and development of the national wealth within its territorial jurisdiction. Provided, that the Regional Government shall likewise be entitled to ten percent (10%) share of the gross collections from the utilization of national wealth sourced or emanating from the autonomous region by persons, individual or juridical, operating outside the territorial jurisdiction of the autonomous region. Provided that the share in national wealth shall be used for the preservation and further development of the environment.

Local Government Units shall have a share of one and one-half percent (1.5%) of the gross sales or receipts or fifty percent (50%) of the gross collection, whichever is higher, derived from renewable energy taxes, mining taxes, royalties, forestry and fishery charges, and such other taxes, fees and charges, including related surcharges, interests or fines, and from its share in any co-production, joint ventures or production sharing agreement in the utilization and development of the national wealth within their territorial jurisdiction. This provision shall be applicable to all corporations, partnership, individuals and other entities including government agencies and government owned or controlled corporations engaged in the utilization and development of the national wealth within the region irrespective of existing contrary laws, rules and regulations of national application.

(c) Two percent (2%) share out of the Economic Zones Tax. The Regional Government shall have a separate two percent (2%) share out of the five percent (5%) final tax on gross income earned or equivalent to forty percent (40%) of total tax paid by businesses within the economic zones found in the Cordillera, in addition to the existing shares of the local government units. The fund shall be used for Trade and Industry programs.

Local government units shall have a separate two percent (2%) share out of the five percent (5%) final tax on gross tax paid by businesses within the economic zones.

(d) Twenty percent (20%) Share of Excess in Value Added Tax. The Regional Government shall have a separate twenty percent (20%) share of the excess in VAT collections from the immediately preceding year. The fund shall support cottage industry programs.

Local government units shall have a separate twenty percent (20%) share of the excess in VAT collections from the immediately preceding year.

(e) Fifteen percent (15%) Share of Total Excise Tax. The Regional Government shall have a separate fifteen percent (15%) share of the total excise tax collection on locally manufactured Virginia-type cigarettes manufactured within the territorial jurisdiction of the autonomous region for the second calendar year preceding the year of distribution, in addition to the existing shares of the local government units. The fund shall be used for agriculture programs.

Local government units shall have a separate fifteen percent (15%) share from the total excise tax collection on locally manufactured Virginia-type cigarettes for the second year preceding the year of distribution.

(f) Fifteen percent (15%) Share of Incremental Excise Tax on Burley and Native Tobacco Products. The Regional Government shall have a separate fifteen percent (15%) share of the excise tax collected on burley and native tobacco products collected within the region. The fund shall be used for agriculture programs.

Local Government Units shall have a separate fifteen percent (15%) share of the excise tax collected on burley and native tobacco products.

(g) Forty percent (40%) Share of Mini-Hydro Electric Power Tax. The Regional Government shall have a separate forty percent (40%) of the special privilege tax on mini-hydroelectric power developers within the region for the maintenance of the watershed.

Local government units' share from the Mini-hydro electric power tax shall be based on the computation provided under the Local Government Code (RA 7160).

(h) One percent (1%) of net income of Philippine Amusement and Gaming Corporation (PAGCOR) and Philippine Charity Sweepstakes Office (PCSO) for construction and maintenance of school buildings, hospitals and related structures and services.

(i) Shares in future tax impositions by the national government.

Section 104. The Regional Government shall have the power to create its own sources of revenues and to levy fees and charges except the power to impose taxes, subject to such guidelines and limitations as the Constitution and this Act may provide, consistent with the basic policy of local autonomy and which include but not limited to the following:

  1. Revenue derived from operation of economic enterprise established by the Regional Government.

  2. Fees and charges on services that the Regional Government may provide.

  3. Appropriations and other budgetary aids from the national government.

  4. Share in the proceeds from the development and utilization of resources within the region.

  5. Share in revenues generated from the operation of public utilities within the region as may be determined by law.

  6. Net revenues from public works contracts executed between the national government and the autonomous region or its component provinces, cities, municipalities, and barangays.

  7. Contributions to the autonomous region for the cost of maintaining programs or areas that the national government considers important to national survival or sustainable development such as reforestation or rehabilitation and protection of the natural environment especially watersheds, declared national heritage sites, historical sites, and such other areas within the autonomous region consistent with existing laws those applicable in the future.

  8. Block grants derived from economic agreements or conventions authorized by the Regional Government, donations, endowments, foreign assistance, and other forms of aid, subject to the Constitution and national laws.

Section 105. All corporations, partnerships, and other entities, including government agencies, government-owned and -controlled corporations directly engaged in business in the region shall pay their corresponding taxes, fees, and charges to the province, city, municipality or barangays where such establishments are conducting their business operations irrespective of the location of their principal or main offices.

Section 106. Appropriations from the national government.

  1. Regional line agencies. The national government shall continue to provide appropriations for the regular operations and programs of line agencies in the region. In addition, each national government agency shall appropriate not less than five percent (5%) of its nationwide lumpsums to fund priority programs in the region.

  2. Regional structure. The national government shall provide appropriations for the mandatory organizational structure and positions of the Regional Government.

  3. The Regional Government may access other special purpose funds appropriated in the national budget.

Section 107. Eighty percent (80%) share of national fees and charges collected within the region (e.g. DOTC, LTO, NBI, NSO, BID, PEZA, DFA, DOH, DPWH, DENR, PRC, DOT, etc.) shall be directly remitted to the regional treasury and fifty percent (50%) of this share shall be automatically retained by the collecting agencies to augment their regular operating expenses.

Section 108. Donations or grants to the region to finance, to provide for, or to be used in undertaking projects in health, education, culture, youth and sports development, human settlements, science and technology, and in economic development, shall be deductible in full in determining the taxable income of the donor or grantor. Provided, that the validation and certification processes for such donations or grants shall have been done according to regional law.

Section 109. The Regional Government, in accordance with the provisions of the Constitution and national laws and upon the recommendation of the Regional Development Board and ratification of the Regional Assembly, shall evolve a system of economic agreements or trade compacts to generate grants and foreign loans for development of the

Section 110. The Regional Governor may contract loans only in accordance with the provisions of the Constitution and national laws and subject to the approval of the Regional Assembly.

Section 111. The Regional Assembly shall have the power to grant tax incentives or exemption on taxes which the autonomous region is empowered under this Act to impose. An ordinance granting incentives, exemptions or both shall only be passed with the concurrence of a majority of all the members of the Regional Assembly.

Section 112. The Regional Government may establish and capitalize a Regional Development Bank which shall administer its own funds. The bank shall be under the supervision of the Bangko Sentral ng Pilipinas (BSP) and under the general banking laws.

Section 113. The Regional Government shall utilize the same fiscal and regulatory licensing standards required by the national government.