Escudero on BBL: More revenues for Bangsamoro, less for Makati?

Sen. Francis “Chiz” Escudero on Tuesday said the Bangsamoro Basic Law (BBL) may result in unintended consequences such as the shift of tax revenues from cities like Manila to provinces under the proposed political entity.

“The BBL corrects a longtime problem insofar as local government is concerned,” Escudero said during the hearing of the Senate committee on local government. “That where the actual business is, that’s where the taxes should be paid. Not where the principal office is located.”

Sen. Francis Escudero. INQUIRER PHOTO

During the said hearing, the Citizen’s Peace Council, which was tapped by President Benigno Aquino III amid public backlash on the Mamasapano operation and the peace process, presented the results of its study on the controversial draft BBL.

Escudero said many companies operating in Mindanao had head offices in cities like Makati and that was where they remit their taxes.

The senator said it might result in political implications, in addition to entities outside the Bangsamoro being affected by the creation of a new political entity, based on the BBL and the peace agreements between the government and the Moro Islamic Liberation Front.

“This provision will drastically affect the income of Makati. Many businesses in the Philippines have offices in Makati,” he said.

Escudero was referring to the BBL article on fiscal autonomy. The proposed BBL states that “corporations, partnerships, or firms whose central, main, or head offices are located outside the Bangsamoro but which are doing business within its territorial jurisdiction by farming, developing, or utilizing the land, aquatic, or natural resources therein, shall pay the income taxes corresponding to the income realized from their business operations in the Bangsamoro to the city, or municipality where their branch offices or business operations or activities are located.”

The senator said such repercussions should be considered when planning the plebiscite for the BBL. He said those living outside the Bangsamoro should also be considered since “their lives will be affected … [And it might result in the] reduction of the income they will be receiving.”

In addition to taxes from local businesses, Escudero pointed out that the Bangsamoro government would also receive a 75 percent share of taxes and other fees. He said this was something other local government units did not have.

Under the proposed BBL, “central government taxes, fees, and charges collected in the Bangsamoro, other than tariff and customs duties, shall be shared as follows: (a) Twenty-five percent (25%) to the central government; and (b) seventy-five percent (75%) to the Bangsamoro, including the shares of the local government units.”

Escudero asked the council to look into such issues and to give recommendations. RC