City to receive P85M Peza shares

THE long wait is finally over as Baguio City is set to receive some P85 million for the operation of the Philippine Economic Zone Authority (Peza) this year.

Last September 4, Department of Budget and Management (DBM) Secretary Florencio Abad issued a memorandum directing DBM-Cordillera Director Liza Fangsilat to process the Special Allocation Release Order of P85 million as city shares in the gross income taxes paid from 1995 to 2002 by all businesses and enterprises within the Baguio City Export Processing Zone.

The amount released by the Department of Budget and Management (DBM) is part of the P125 million shares of the city from the operations of Peza that were wrongfully remitted by the Bureau of Internal Revenue to the National Government treasury.

The release is pursuant to Republic Act 7916 or the National Wealth Tax shares facilitated by House Bill 4410 authored by Representative Neptali Gonzales III and co-authored by Representative Bernardo Vergara entitled, “Direct Remittance To The Host Local Government Of Its Forty Percent Share Of The Proceeds Derived From The Utilization And Development Of National Wealth” last year.

The P125 million revenue shares from the locators of Peza was initially approved in the 2012 National Budget in the House of Representatives and Senate, the Bicameral Conference Committee but was vetoed last year by President Benigno Aquino III.

Upon appeal, however, of Mayor Mauricio Domogan and Representative Vergara to President Aquino, Secretary Abad last year told them the shares will be released anytime this year upon the release of an updated certification from the Bureau of Internal Revenue (BIR).

Last March 14, the BIR issued an updated certification together with another certification from the Bureau of Treasury issued last July 25 indicating the two percent share of the city from the declaration of the Economic Zones and shares from the Special Development Fund amounted to P86,878,355.52.

While the P85 million will be released this year, the remaining P1.8 million has been included in the 2013 National Expenditure Program and will be released upon approval of the 2013 National Budget.

Earlier, Mayor Domogan said the partial shares will help finance several priority projects of the city such as the development of its assets such as the Baguio Convention Center and the Baguio Athletic Bowl.

He also vowed to work on the release of the remaining balance of the uncollected shares as soon as possible.

As specified in the Special Economic Zone Act, locators with identified economic zones such as Baguio City are obliged to pay directly to local governments some 40 percent of gross taxes collected representing the share of the local governments from its operations.

However, despite implementation of the law in 1995, locators in Special Economic Zones continued to remit to the BIR 100 percent of taxes collected in economic zones.

This deprived the host local governments such as Baguio its share in revenues from 1995 until 2002 that totaled to P125 million until such time that city officials complained on the unremitted share of the local government from the operation of Peza locators.

To recall, former President and now Pampanga Representative Gloria Arroyo also vetoed the provision in the 2009 General Appropriations authorizing the payment of P125 million to Baguio City representing its accumulated unremitted share from the operations of Peza.