3 Motions in Motion - Mandanas’ Mandamus Part 3

#IRAitamaNaSa2019!

With the filing of the Office of the Solicitor General (OSG) last August 10 of its Motion for Reconsideration (MR) asking the Supreme Court hoping to reverse its latest 10-3 decision on the Mandanas and Garcia petitions, this has set into motion the filing of a partial Motion for Reconsideration last August 20 of the Supreme Court’s decision denying the IRA payback by Cong. Joet Garcia and Gov. Abet Garcia of the Province of Bataan, in behalf of their late father, former Gov. and Cong. Tet Garcia. 

Since the MR of the OSG only covered the issue on the validity of Sec. 284 of the LGCode raised by the Garcia petition, Gov. Mandanas will also be filing a Motion for Execution requesting the Supreme Court to separately rule with finality on the prospective implementation of his petition while awaiting its judgement on the OSG’s MR on the Garcia petition, i.e. that IRA should be based on “national taxes”. This pertains solely on the immediate inclusion of the BOC’s “internal revenue” collections.

In the MR of the OSG, it conspicuously did not contest the Court’s ruling on the inclusion of the BOC taxes which are considered and already clearly defined under Sec. 211 of RA 8424 as “internal revenue” taxes.  The SC was, in fact, unanimous on the inclusion of the BOC’s internal revenue collections in the revenue base used as basis for the 40% IRA share of LGUs, being a duly-authorized deputized agent of the BIR for imported goods under Sec. 122 of RA 8424.  Hence, this is already a settled issue and must be implemented by the Executive Branch, as ordered by the Supreme Court.

To reinforce its claim for the IRA payback even on the LGUs’ uncollected share from internal revenue taxes, Garcia also cited the specific Sections on internal revenue taxes collected by BOC on imported goods 1073 (VAT), 1294 (Excise taxes) and 1825 (Doc stamps) under RA 8424 – a law passed by Congress in 1997.  But even as far back as 1986, under the old internal revenue tax code or Section 4 of PD 1994, BOC collections on VAT and excise taxes for imported goods are included as internal revenues.

So, when the LGCode was passed in 1992, the determination of the internal revenue base should have necessarily included these taxes collected by the BOC that should have formed part of the BIR certifications since 1992 but it was not included.  It is but logical to repay the shortfalls similar to what former President Estrada and Arroyo paid the LGUs a total of P64 Billion in IRA shortfalls on a staggered basis immediately after the SC ruled on the unconstitutionality of these IRA cuts.

For the National Government to have excluded these BOC taxes since 1992 was simply unjust and that LGUs should be entitled to collect the arrears retroactively from its mandated share from the internal revenue taxes.  But with regard to its Constitutional right to receive a just share from all national taxes, this should be prospectively applied beginning FY 2019 and thereafter. #IRAitamaNaSa2019!

Hence, altogether, three (3) Motions are now set in motion.  It is now up to the Supreme Court to decide. The question now is when will this be final and executory under the leadership of the newly-appointed Chief Justice Teresita de Castro who previously voted in the affirmative.

(to be continued…)


1”SEC. 21.  Sources of Revenue. - The following taxes, fees and charges are deemed to be national internal revenue taxes:
(a) Income tax;
(b) Estate and donor's taxes;
(c) Value-added tax;
(d) Other percentage taxes;
(e) Excise taxes;
(f) Documentary stamp taxes; and
(g) Such other taxes as are or hereafter may be imposed and collected by the Bureau of Internal Revenue.”

2”SEC. 12. Agents and Deputies for Collection of National Internal Revenue Taxes. - The following are hereby constituted agents of the Commissioner:
(a) The Commissioner of Customs and his subordinates with respect to the collection of national internal revenue taxes on imported goods;”

3”SEC. 107. Value-Added Tax on Importation of Goods. –
(A) In General. - There shall be levied, assessed and collected on every importation of goods a value-added tax equivalent to ten percent (10%) [47] based on the total value used by the Bureau of Customs in determining tariff and customs duties plus customs duties, excise taxes, if any, and other charges, such tax to be paid by the importer prior to the release of such goods from customs custody: Provided, That where the customs duties are determined on the basis of the quantity or volume of the goods, the value-added tax shall be based on the landed cost plus excise taxes, if any Provided, further, That the President, upon the recommendation of the Secretary of Finance, shall, effective January 1, 2006, raise the rate of the value-added tax to twelve percent (12%), after any of the following conditions has been satisfied:”

4”SEC.129. Goods subject to Excise Taxes. - Excise taxes apply to goods manufactured or produced in the Philippines for domestic sales or consumption or for any other disposition and to things imported. The excise tax imposed herein shall be in addition to the value-added tax imposed under Title IV.”

5”SEC. 182. Stamp Tax on Foreign Bills of Exchange and Letters of Credit. - On all foreign bills of exchange and letters of credit (including orders, by telegraph or otherwise, for the payment of money issued by express or steamship companies or by any person or persons) drawn in but payable out of the Philippines in a set of three (3) or more according to the custom of merchants and bankers, there shall be collected a documentary stamp tax of Thirty centavos (P0.30) on each Two hundred pesos (P200), or fractional part thereof, of the face value of any such bill of exchange or letter of credit, or the Philippine equivalent of such face value, if expressed in foreign currency.”

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About the Author
Sandra Tablan Paredes is presently the Executive Director of the League of Provinces of the Philippines (LPP) since October, 2016 although she previously served LPP as Director from 1997 to 2004 Sandy helped organize ULAP in 1998 with former Governor Joey Lina and advocated for the LGUs' rightful IRA share, among other league advocacies, programs and projects to help local officials ensure local and fiscal autonomy and good governance. Recently served as concurrent interim Executive Director of ULAP from Jan-March 31, 2017. You can email her at This email address is being protected from spambots. You need JavaScript enabled to view it.
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