BIG business establishments and corporations with branches will have to pay their taxes to the host local government units (LGUs).
The propasal is through a resolution by Iloilo City Councilor Jeffrey Ganzon requesting Congress to amend the national internal revenue code requiring large business taxpayers and establishments to pay taxes to the LGUs.
Ganzon admitted that his proposal may not be acted by Congress immediately but the National Government is in preparation for a shift to the federal system of government slated to be enacted before the term end of President Rodrigo Duterte in 2022.
It should be noted then that Iloilo City is the first to act and seek amendment in Congress regarding the business taxes of big business with branches in the host LGUs, Ganzon said.
The 1987 Philippine Constitution provides that the State shall ensure the autonomy of local governments and Section 129 of the Local Government Code of 1991 states that each LGU shall exercise its power to create its own sources of revenue and levy taxes, fees and charges consistent with the basic policy of local autonomy.
Ganzon said such taxes, fees and charges shall accrue exclusively to the LGUs.
Classified as big taxpayers, these businesses have main offices in Metro Manila and Cebu.
They are paying millions of pesos in taxes in their main offices but not in places where they are doing business thereby depriving their host LGU of the much needed revenues.
Ganzon said this particularly practice is economically unfair and unjust to their host LGU.
He said it is very hard to audit and keep track of the correct income of these establishments and corporations to collect the proper taxes due.
As of the present, taxes paid by large businesses cover value-added tax, excise tax, income tax, withholding tax, percentage tax and documentary stamps.
As to financial condition and results of operation of big business for the commutation of taxes, any taxpayer with total annual gross sales and receipts of at least P1 billion for the preceding year, any taxpayer with a total net worth of at least P300 million at the close of each calendar or fiscal year, any taxpayer with total annual gross purchases of at least P800 million for the preceding year, and the top corporate taxpayers listed and published by the Securities and Exchange Commission. (LCP/Sunnex)