THE Department of Finance (DOF) suggested on Tuesday few amendments to some fiscal provisions of the proposed Bangsamoro Basic Law (BBL).
In a letter to the Senate, Finance Undersecretary Gil Betran said a clear delineation of fiscal powers and functions between the national government and the Bangsamoro government should be adopted to ensure clarity and consistency.
Beltran also said the wording in several provisions on fiscal autonomy should be consistent with the language of the Annex on Revenue Generation and Wealth Sharing of the Framework Agreement on the Bangsamoro (FAB).
The Annex on Revenue Generation and Wealth Sharing, which is the accompanying document to the FAB, provides that "the Bangsamoro will have the authority to contract loans with any lending institution, except in cases requiring sovereign guarantees which the central government will provide."
Beltran said it should also be clear that any tax incentive that may be granted by the Bangsamoro government is limited to the tax imposed by it and not encroach on the authority of Congress to provide incentives imposed by it.
He added that any refund or rebate that may be granted should be funded from the Bangsamoro funds or budget.
The DOF proposed the taxes that will be imposed by the Bangsamoro government should be specified by and limited to four taxes only – capital gains tax, documentary stamp tax, donor’s tax and estate tax.
The deletion of the second sentence of the last paragraph on the taxing powers was also suggested by the department, noting that the functions of the Intergovernmental Fiscal Policy Board should be clarified.
During the Senate hearing on the draft BBL, Senate local government committee chairman Ferdinand Marcos Jr. asked government peace panel chair Miriam Coronel-Ferrer about the role of the IFPB.
Ferrer said the board will recommend and review the block grant for the Bangsamoro government, which is estimated at P27 billion on the first year of the political entity's establishment.
"It is supposed to support the implementation of the BBL vis-à-vis fiscal matters," she said.
On the assessment and collection of taxes, the DOF said the second paragraph, as well as fourth paragraph of Section 11, Article 12 of the measure, should be deleted.
To avoid confusion and differing interpretations, Beltran said the wordings in the wealth sharing annex should be adopted in Section 22, Article Section 12 of the draft law, which provides foreign and domestic loans, bills, bonds, notes and obligation.
Beltran said the Bangsamoro government may avail of overseas development assistance "except those requiring sovereign guaranty, which require national government approval."
On the sharing in exploration, development and utilization of natural resource, the DOF sought to delete the phrase "as well as the waters that are within the territorial jurisdiction of the Bangsamoro." (Sunnex)