Republic Act No. 6734/Article X

by Congress of the Philippines

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Article X

FISCAL AUTONOMY

Section 1. The Autonomous Region shall have the power to create its own sources of revenues and to levy taxes, fees and charges, subject to such guidelines and limitations as the Constitution and this Organic Act may provide, consistent with the basic policy of local autonomy.

Sec. . In enacting revenue-raising measures, the Regional Assembly shall observe the principle of uniformity and equity in taxation and shall not impose confiscatory taxes or fees of any kind. Income taxation, however, shall be solely the concern and prerogative of the National Government.

The Regional Assembly shall not revoke or amend, directly or indirectly, any city or municipal ordinances imposing taxes or fees on purely local businesses.

No tax, impost or assessment shall be imposed or charged upon goods or merchandise coming into, going out of, or passing through the Autonomous Region to other places of the Philippines, and vice versa.

Sec. 3. All corporations, partnerships, and other business entities directly engaged in business in the Autonomous Region shall pay through the Regional Government that portion of their annual income tax corresponding to the net income generated from business done in the area of autonomy.

All corporations, partnerships or business entities directly engaged in business in the Autonomous Region shall pay their corresponding taxes, fees, and charges in the province, city, or municipality where the establishment is doing business.

Sec. 4. The sources of revenues of the Autonomous Region shall include, but are not limited to, the following:

(1) Taxes, except income taxes, imposed by the Regional Government;

(2) Fees and charges imposed by the Regional Government;

(3) Appropriations, internal revenue allotments and other budgetary allotments from the National Government;

(4) Shares in revenues generated from the operations of public utilities within the Autonomous Region; and

(5) Block grants derived from economic agreements or conventions authorized by the Autonomous Region, donations, endowments, foreign assistance, and other forms of aid, subject to the Constitution and national policies.

Sec. 5. The total collections of a province or city from national internal revenue taxes, fees and charges, and taxes imposed on natural resources, shall be distributed as follows:

(a) Thirty percent (30%) to the province or city;

(b) Thirty percent (30%) to the Regional Government; and

(c) Forty percent (40%) to the National Government.

The thirty percent (30%) share of the province shall be distributed equally as follows: ten percent (10%) to the province, ten percent (10%) to the municipality and ten percent (10%) to the barangay.

The thirty percent (30%) share of the city shall be distributed as follows: twenty percent (20%) to the city and ten percent (10%) to the barangay.

The province or city concerned shall automatically retain its share and remit the seventy percent (70%) to the Regional Government, which shall, after deducting its share, remit the balance to the National Government on a monthly basis.

The remittance procedure within the Autonomous Region shall be in accordance with the rules and regulations promulgated by the Regional Government, and remittances to the National Government by the rules and regulations promulgated by the Department of Finance.

Sec. 6. Subject to the Constitution and national policies, the Regional Government shall evolve a system of economic agreements and trade compacts to generate block grants for regional investments and improvements of regional economic structures. These economic agreements shall be authorized by regional legislation or by executive agreement. Pursuant to specific recommendations from the Regional Planning and Development Board, the Regional Government shall assist local government units in their requirements for counterpart funds for foreign-assisted projects.

Sec. 7. Donations or grants to the Regional Government exclusively to finance, to provide for, or to be used in undertaking projects in education, health, youth and culture, and in economic development, shall be deductible in full in determining the taxable income of the donor or grantor.

Sec. 8. The Regional Assembly may grant exemptions from regional taxes, only with the concurrence of a majority of all the Members of the Assembly.

Sec. 9. Foreign loans may be contracted only in accordance with the provisions of the Constitution and national laws: Provided, That the Regional Governor may contract domestic loans subject to the approval by the Regional Assembly.