BBL constitutional pitfalls noted
Christina Mendez (The Philippine Star) - December 27, 2014 - 12:00am

MANILA, Philippines – The vast powers on fiscal autonomy and taxation to be given the envisioned Bangsamoro government could be a constitutional pitfall for the proposed Bangsamoro Basic Law (BBL).

The Senate Tax Study and Research Office (STSRO) said the draft law contained in Senate Bill 2408 is replete with tax and policy provisions that could run counter to the Constitution.

It has submitted a copy of the study to the Senate committee on local government chaired by Sen. Ferdinand Marcos Jr.

In its official publication Tax Bits, the STSRO underscored section 1 of the proposed proposed law seeking to give the envisioned Bangsamoro government fiscal autonomy for it to attain the highest form of economic self-sufficiency and genuine development.

“This preliminary section provides a hint as to the scope of the delegated taxing powers given to those under the territory of the proposed Bangsamoro,” the STSRO said.

“The (envisioned) Bangsamoro government shall be entitled to all fund sources enumerated herein, and shall have the power to create its sources of revenues as provided in this law. It shall prepare its budget and shall allocate funds in accordance with an annual appropriations law passed by the Bangsamoro Parliament.

“The form, content and manner of preparation of the budget shall be prescribed by law enacted by the Bangsamoro Parliament.”

The STSRO said the Constitution does not allow Congress to delegate its legislative powers.

Section 24 of the Constitution provides: “All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application and private bills, shall originate exclusively in the House of Representatives, but the Senate may proposed or concur with amendments.”

The STSRO said the proposed law would give the envisioned Bangsamoro government the power of taxation.

The envisioned Bangsamoro government would be allowed to collect capital gains tax, documentary stamp tax, donor’s tax, estate tax, income tax on banks and other financial institutions, and fees on vessels registered with the Bangsamoro government, and on agricultural and aquatic products, and tolls on bridges and roads.

The STSRO said the Department of Budget and Management (DBM) adheres to the principle of a “one-fund” concept under Presidential Decree No. 1177.

The one-fund policy concept requires that all income and revenues of the government must accrue to the General Fund.

It can therefore be freely allocated to fund programs and projects of government as prioritized.

Fiscal autonomy

In another position paper, lawyer Sherry Ann Salazar, Senate Indirect Taxes Branch director, said fiscal autonomy under Republic Acts 6734 and 9054, the Autonomous Region in Muslim Mindanao (ARMM) was given the power to create its own sources of revenues and to levy taxes, fees and charges, subject only to the provisions under the Constitution and the Organic Act.

Salazar said the definition of fiscal autonomy under the proposed Bangsamoro Basic Law is more extensive.

“This is because emphasis is given on its right to attain the highest form of economic self-sufficiency and genuine development,” she said.

While the Commission on Audit (COA) can audit the ARMM, the Bangsamoro government will be given authority to create its own auditing body.

“The STSRO said the enactment of Senate Bill 2408 would jeopardized the powers of the Internal Revenue commissioner to supervise the collection of national internal revenue taxes and to interpret tax laws and to decide tax cases.”

The envisioned Bangsamoro government would be granted the power to offer tax incentives to attract investors.

The STSRO also raised the administrative problem on revenue-sharing scheme.

“The envisioned Bangsamoro government would be allowed to establish economic zones and industrial centers and free ports, to receive grants and donations; regulate the manufacture and distribution of foods, drinks, drugs and tobacco, establish Awqaf (endowment) and charitable trusts, foreign investment, and to operate public utilities.

Misuari rejects invitation

Nur Misuari has rejected an invitation to attend a congressional hearing on the proposed BBL.

Moro National Liberation Front (MNLF) spokesman Absalum Cerveza said Misuari or any of his representative is not interested in participating in the hearing as the draft law would practically abrogate the 1996 peace agreement between the government and the MNLF.

He has already informed an emissary of Senate committee on local governments chairman Ferdinand Marcos II about Misuari’s decision, he added.

In a telephone interview, Cerveza told The STAR the MNLF has not yet received the invitation of Cagayan de Oro city Rep. Rufus Rodriguez, but that they would make the same response once they receive it.

“The Bangsamoro Basic Law deals with the same agreement, the same territory and the same people that had been forged in the 1996 peace agreement,” he said.

Cerveza said he sees a strong possibility that the Supreme Court (SC) will declare the BBL unconstitutional because of the government’s exiting peace agreement with the MNLF.

“The BBL hearings is an exercise in futility because eventually it will be declared unconstitutional,” he said.

‘Principled politics’

The Moro Islamic Liberation Front (MILF) is introducing “principled politics” to foster peace and sustainable development in the proposed Bansgamoro core territory.

Speaking to reporters on Thursday, MILF chairman Al-Haj Murad Ebrahim said their newly-formed United Bangsamoro Justice Party (UBJP) aims to “humanize” politics in southern Moro communities.

UBJP secretary-general Sammy Al-Mansour said registry books indicated that more than 100,000 MILF members and supporters participated in their first ever three-day conclave at the MILF’s main bastion, Camp Darapanan in Sultan Kudarat in Maguindanao. – With Perseus Echeminada, John Unson

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