BIR cheating LGUs out of their share of taxes?

The national government is cheating local government units of their just share in the national taxes that is mandated by the Constitution, Bataan Rep. Enrique Garcia told the Kapihan sa Manila at the Diamond Hotel last Monday. With him as guests were Manila Rep. Amado Bagatsing, who is suing Janet Lim Napoles for perjury (Bagatsing is on Napoles’ list of government officials to whom she allegedly gave kickbacks from their pork barrel) and Dr. Esperanza Cayanan of Pagasa who gave a forecast of expected weather patterns with the onset of the rainy season.

Congressman Garcia has filed a case asking the Supreme Court to declare unconstitutional Section 284 of Republic Act No. 7160, or the Local Government Code (LGC).

He said that Section 6, Article X of the Constitution provides:

“Local government units shall have a just share, as determined by law, in the national taxes which shall be automatically released to them.” (Underscoring supplied.)

But Congress, in enacting the LGC, inserted the words “internal revenue.” Thus the pertinent provision reads: “Local government units shall have a share in the national internal revenue taxes based on the collection of the third fiscal year preceding the current fiscal year.” (Underscoring supplied.)

This insertion automatically excludes the collections of the Bureau of Customs (BOC) in the computation of the share the LGUs get from the Internal Revenue Allotment (IRA).

The term “national taxes” is not the same as “national internal revenue taxes,” Garcia argued. The former is broader in scope and greater in volume because the latter is only one of its components.

“All the taxes that are being collected by the national government, of whatever kind or nature and from whatever source, are included in, and form part of, the ‘national taxes’. They include the collections by the Bureau of

Internal Revenue (BIR) of all internal revenue taxes, as well as the collections by the BOC of customs duties, value added tax, and excise taxes on imported goods,” he said.

“On the other hand, ‘national internal revenue taxes’ are limited to those that are deemed to be so under Section 21 of the National Internal Revenue Code. They are thus restricted to the collections of internal revenue taxes by the BIR, and the collections of VAT and excise taxes on imported goods which are declared by law to be internal revenue taxes.

“Necessarily excluded from ‘national internal revenue taxes’ are the customs duties being collected by the BOC.

“The mandate of the Constitution is for the LGUs to have a just share in the ‘national taxes’. Congress, however, changed it by decreeing that LGUs shall have a share in the ‘national internal revenue taxes’. In doing so, Congress has unduly restricted the LGUs’ share and entitlement in clear violation of the Constitution.”

Furthermore, while Section 284 of the LGC makes no mention of any deductions from national internal revenue collections, the BIR does numerous deductions from its collections before the IRA is computed and distributed to the LGUs. After the deductions, the BIR comes up with what it refers to as “basic income.” The share of the LGUs is then based on this “basic income.”

The BIR also does not include the collection of the BOC on imported goods in the computation of national internal revenue taxes, contributing to the huge shortfall in the computation of the IRA.

Garcia showed the immensity of the IRA shortfall: In Region III alone the shortfall for the years 2009 to 2014 totals P87.36 billion.

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For his part, Congressman Bagatsing has filed a complaint against Janet Lim Napoles for perjury. Napoles, in her sworn statement, named Bagatsing among those involved in the pork barrel scam. Bagatsing showed photocopies of his supposed letters endorsing his pork barrel to bogus NGOs of Napoles, pointing out that his signatures were forged and printed on a generic logo of Congress and falsified letterhead of his congressional office.

Bagatsing also said that he became a congressman only on June 30, 2007, whereas the first PDAF allocated to his district was released by the Department of Budget and Management only on Jan. 2, 2008. He could not have implemented a PDAF project in 2007.

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Pagasa’s Cayanan told the journalists that there will be three or four weak typhoons in June and July but strong ones in August and September, the typhoon season. The people should take precautions during these months, she said.

And because of El Niño, this coming summer will be hot and dry, she said. While we will have too much water during the typhoon season, we will have too little in summer. If only we can save all that water for use during the dry season!

She explained the thunderstorms in late afternoons and early evenings thus: When it is hot, water evaporates. The warm moisture keeps going higher until it reaches the coldness of the stratosphere. There the moisture condenses and then falls as rain, sometimes with hail. So the hotter the mornings and afternoons, the more likely will there be evening thunderstorms.