De La Salle University Manila College of Law Taft Avenue, Manila

In partial fulfillment of the requirements in LEGAL WRITING 3

This ropose! "angsamoro rovisions on Ta#es, $ees an! Charges is su%mitte! to Atty. Johaira C. Wahab

"y De Guzman, Mark ri!to""er!on #. Lomo$, Mark %au& T. Mi'ue&, Anna %atri(ia Tamon$on', )onia *. "lo&' ()*

)n De&em%er +*, +,*Se&on! Trimester +,*-.+,*/

BANGSAMORO BASIC LAW ARTICLE ___ Fiscal Autonomy Section 1. Re enue Sou!ce. " The Bangsamoro Government shall have (a) the power to create its own sources of revenues and to levy taxes, fees and charges; (b) an equitable share in the revenues from the utili ation and development of the natural resources within its territory; and (c) the authority to receive grants and donations from domestic and foreign sources, as well as bloc! grants and subsidies from the "entral Government, sub#ect to the provisions of the "onstitution and this $rganic %ct, consistent with the basic policy of local autonomy& Section #. Gene!atin$ Re enues. % The Bangsamoro will have several means of generating revenues' (a) taxation; (b) fees and charges; (c) grants and donations; (d) loans, credits and other forms of indebtedness; (e) fund transfers from the "entral Government; and (f) other sources of revenue& Section &. Ta'ation. % %ll powers over taxes and revenue generation already devolved to the %utonomous (egion for )uslim )indanao (%())) through (&%& *o& +,-. and other legislations shall be exercised by the Bangsamoro& /n addition to these taxing powers, the Bangsamoro shall also have the power to levy capital gains tax, documentary stamp tax, donor0s tax, and estate tax where all taxable elements are within the Bangsamoro& The Bangsamoro Government shall have the power to grant tax exemptions, rebates, tax holidays and other incentives& /t will also exercise powers and functions devolved to the %()) (egional Board of /nvestments& Section (. Fees an) C*a!$es. % The Bangsamoro will have the power to levy fees and charges in connection with the powers and functions that it shall exercise& Section +. G!ants an) ,onations. % The Bangsamoro may receive grants from donors, and such grants will be received by it directly& Section -. Loans. C!e)its an) Ot*e! Fo!ms o/ In)e0te)ness. % The Bangsamoro shall have the authority to contract loans, credits, and other forms of indebtedness with any government or private ban! and other lending institutions& 1oans requiring sovereign guaranty would require the approval of the "entral Government& Section 1. Fun) T!ans/e!s /!om Cent!al Go e!nment. % The

"entral Government shall provide a bloc! grant to the Bangsamoro& This bloc! grant shall be based on a formula, which shall be provided by law& This formula will ta!e into account the cost of government functions to be devolved to the Bangsamoro and will ensure that the bloc! grant will be no less than the last budget received by the %()) immediately before the establishment of the Bangsamoro Transition %uthority& The Bangsamoro Basic 1aw shall herein provide a system for the automatic appropriation for and regular release of the bloc! grant& /n order to ad#ust to the Bangsamoro0s actual needs, as well as the amount of revenues it generates on its own, the formula shall be sub#ect to review by the "entral Government and the Bangsamoro Government after ten (2,) years& The "entral Government shall also provide for a 3pecial 4evelopment 5und to the Bangsamoro for rehabilitation and development purposes upon the ratification of this Bangsamoro Basic 1aw& $nce the Bangsamoro attains financial self6sustainability, it will also assist other regions in their development efforts& Section 2. Ot*e! Sou!ces o/ Re enue. % Government income derived from the operations of Bangsamoro government6owned6and6 controlled corporations (G$""s), financial institutions, economic ones, and freeports operating therein shall go to the Bangsamoro Government& The Bangsamoro may receive grants derived from economic agreements entered into or authori ed by the Bangsamoro %ssembly (donations, endowments, and other forms of aid)& The Bangsamoro shall also be entitled to benefits resulting from conventions to which the "entral Government is a party& Section 3. Wealt* S*a!in$. % The Bangsamoro and the "entral Government will share in the following revenues generated within the Bangsamoro' (a) shares in national taxes; and (b) revenues from the exploration, development and utili ation of natural resources& Section 14. S*a!es in National Ta'es. % "entral Government taxes, fees and charges collected in the Bangsamoro, other than tariff and customs duties, shall be shared as follows' (a)Twenty6five percent (7-8) to the "entral Government; and (b) 3eventy6five percent (9-8) to the Bangsamoro, including the shares of the local government units&

The twenty6five percent (7-8) due to the "entral Government will be remitted to the Bangsamoro for a limited period of time&

Section 11. Re enues /!om t*e E'5lo!ation. ,e elo5ment an) 6tili7ation o/ Natu!al Resou!ces. % Government income derived from the exploration, development and utili ation of natural resources within the Bangsamoro shall be allocated as follows' (a) :ith respect to non6metallic minerals (sand, gravel, and quarry resources) within the Bangsamoro, such revenues shall pertain to the Bangsamoro and its local government units& :ith respect to metallic minerals within the Bangsamoro, seventy6 five percent (9-8) of such revenues shall pertain to the Bangsamoro& :ith respect to fossil fuels (petroleum, natural gas, and coal) and uranium, the same shall be shared equally between the "entral and Bangsamoro governments& Both ;arties shall endeavor to provide for a review mechanism in the Basic 1aw with regard to this sharing arrangement&

(b)

(c)

The shares of the Bangsamoro above shall include those for its constituent local government units, as shall be provided by law& Section 1#. ,e)uctions /!om t*e Annual Bloc8 G!ant. % The following amounts will be deducted from the amount comprising the annual bloc! grant' (a) (b) (evenues from additional taxes beyond those already devolved to the %()); and The Bangsamoro0s share in revenues derived from exploration, development and utili ation of natural resources&

These deductions shall be suspended for four (.) years from the full operation of the Bangsamoro& This deduction will not affect the #ust share of the Bangsamoro0s constituent local government units in the national taxes& Section 1&. Fiscal A)minist!ation. % The Bangsamoro Government0s annual bloc! grant shall undergo internal budget processes and shall be allocated by the Bangsamoro Government in an appropriations act& The Bangsamoro shall also have the power to establish offices for the purpose of assessing and collecting its taxes& There shall be an intergovernmental fiscal policy board composed of representatives of the Bangsamoro and the "entral Government& %mong other tas!s, it shall underta!e a periodic review of the taxing powers, tax base and rates of the Bangsamoro Government, wealth sharing

arrangements, and sources of revenues, vis6a6vis the development needs of the Bangsamoro& /t shall also address problems regarding the Bangsamoro0s power to levy capital gains tax, documentary stamp tax, donor<s tax, and estate tax where all taxable elements are not situated entirely within the Bangsamoro& There shall be a Bangsamoro auditing body, which shall have auditing responsibility over public funds utili ed by the Bangsamoro& The Bangsamoro Basic 1aw shall provide for a clear delineation of the Bangsamoro auditing body& This should be without pre#udice to the power, authority and duty of the national "ommission on %udit to examine, audit and settle all accounts pertaining to the revenues and the use of funds and property owned and held in trust by any government instrumentality, including G$""s& The Bangsamoro shall formulate its development plans, consistent with national development, to address, among others, post6conflict rehabilitation, reconstruction, and development in the region& The Bangsamoro shall also ensure that the needs of women and men are adequately addressed in the utili ation of public funds& The Bangsamoro 3ustainable 4evelopment Body shall get funding support from the proceeds of the revenues collected from these sources& Section 1(. ,e)ucti0le )onations o! $!ants. " 4onations or grants to the (egional Government exclusively to finance, to provide, for, or to be used in underta!ing pro#ects in education, health, youth and culture, and in economic development, shall be deductible in full in determining the taxable income of the donor or grantor& Section 1+. Ta' E'em5tions. " The (egional %ssembly may grant exemptions from regional taxes, only with the concurrence of a ma#ority of all the )embers of the %ssembly& Section 1-. Fo!ei$n Loans. " 5oreign loans may be contracted only in accordance with the provisions of the "onstitution and national laws' ;rovided, That the (egional Governor may contract domestic loans sub#ect to the approval by the (egional %ssembly&