Source: www.ndb-online.com
The League of Provinces in the Philippines, the organization of governors around the country, is strongly opposing the Bureau of Internal Revenue (BIR) in its move to tax the economic enterprises of the local government units, Governor Alfredo Marañon Jr. said yesterday.
Marañon said the governors discussed yesterday the BIR issue, which he raised before the group, during their meeting in Manila.
He explained that although he was not around at the meeting yesterday, he had informed the other governors about it. Marañon had to fly back to Bacolod yesterday morning for a meeting with former Senator Mar Roxas on important thrusts of his administration.
Marañon said the governors are unanimous in their decision not to pay any tax to the BIR. He said that the consensus of the group is that their proprietary activities should not be taxed, as it is not a private enterprise.
Last week, Marañon had a dialog with BIR Revenue Region 12 Diretor Araceli Francisco at the Provincial Capitol. Francisco had presented to him and the provincial government officials taxation of local government proprietary functions.
But Marañon stood firm in his decision not to pay income taxes and said in jest that if the BIR insists, he will take the matter to the Supreme Court.
Francisco, when interviewed after the dialog, said, "Well, it’s a free country. He is entitled to that."
"We only collect taxes if it’s a profit, if it’s not we don’t collect anything. When we do an audit, it’s not primarily to collect tax, but to check whether they’re keeping the books accordingly," she added.
In November last year, Francisco wrote to Marañon that the agency is mandated to advise all local government units of the taxability of its proprietary activities.
She added in the letter that the Negros Occidental provincial government should register its proprietary activities, file prescribed invoicing requirements, and pay corresponding taxes due hereon.
The economic enterprises of the Capitol are the Mambukal Resort, its provincial and district hospitals, Sweet City Captel, Panaad Park and Stadium, multi-purpose gym and pala-pala.
Provincial Legal Officer Jose Ma. Valencia earlier said the Local Government Code states that LGUs are encouraged to raise revenues on their own so they will not be Internal Revenue Allotment-dependent, and the funds should be use exclusively for the disposition of LGU services to their constituents and not for taxes.*
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