BIR does not include these BOC collections as part of their certification.
July 4, originally the “Araw ng Kalayaan” or Independence Day celebrated here in the Philippines, we received the great news about the official tweet of the Supreme Court’s public information office which read: “En Banc Actions, July 3, 2018 | G.R. No. 199802, Mandanas, et al. v. Ochoa, et al. and G.R. No. 208488, Garcia Jr. v. Paquito Ochoa, et al., SC (10-3) rules that IRA of LGUs should be based on "national taxes" and not "national internal revenue taxes."
The redeeming and liberating development came hours before local officials’ meeting with Secretaries Bong Go and Harry Roque in Malacanang to appeal to President Duterte to reconsider the DBCC decision not to revoke its Resolution 2003-02 on the determination of the internal revenue base and to prospectively correct the duly-mandated computation of the IRA of LGUs, among other issues.
At last, after waiting for 7 long years, 5 months, and 24 days since Batangas Gov. Hermilando Mandanas filed a case before the Supreme Court on January 10, 2012, the long wait is over for local government units. Under SC G.R. No. 199802, Gov. Mandanas filed a Certiorari “to set aside as unconstitutional the misuse, misallocation and even misappropriation, of some P60.75 billion under RA 10155” (GAA 2012) and questioned the “premeditated design” or “calculated oversight” by the Bureau of Internal Revenue (BIR) in erroneously computing the legally-mandated revenue base of the IRA due to the non-inclusion of the BOC’s national internal revenue taxes (NIRT) collected from VAT, Excise taxes and documentary stamp tax (DST) imposed on imported goods. He pleaded a Mandamus to compel the Respondents “to comply with their ministerial duty under the Constitution and the Local Government Code of 1991 and cause the automatic release in 2012 of the LGUs’ IRA including their 40% share of the 2009 NIRT collections of the BOC and to compel the LGUs their unpaid IRAs from BOC collections of NIRTs from 1989 to 2009” which was placed then by BOC at P498.854 Billion.
Former BIR Commissioner Henares publicly admitted then that the NIRT collections of BOC had not been included in determining the revenue base of the IRA since “the same were considered by the Bureau of Treasury (BTr) as part of the collection performance of the BOC.” Another excuse given was that the BOC does not submit its report to the BIR but only to the BTr. Hence, BIR does not include these BOC collections as part of their certification.
With the recent ruling of the Supreme Court on the Mandanas case, the long-standing issue will finally be put to rest in favor of LGUs who are directly tasked to provide the basic services to the people.
(To be continued…)