SBMA soon to collect LGU share in freeport tax

The Subic Bay Metropolitan Authority (SBMA) will soon be collecting the 2 percent share of contiguous local government units (LGUs) from corporate taxes paid by business locators in the free port instead of the Bureau of Internal Revenue (BIR).

"We are doing this to make sure that the LGU shares are distributed quickly," SBMA administrator and CEO Armand Arreza said.

Arreza said previously, Subic locators forwarded their corporate tax, equivalent to 5 percent of their gross income, straight to the BIR, which automatically remitted payments to the national treasury.

The Department of Budget Management then released the 2 percent share to the LGUs.

Arreza said that since the creation of the SBMA, the 2 percent share has only been distributed for a few years, resulting to complaints from LGUs.

Arreza said the funds could have been used to finance LGU development projects and provide for basic support services in health, education, and peace and order.

"It is but right and lawful that the LGUs receive their share on a regular basis," he stressed.

According to Republic Act No. 9400, which amended RA 7227 or the Bases Conversion and Development Act of 1992, no national and local taxes shall be imposed within the Subic Special Economic Zone except for a 5 percent tax on gross income earned by business enterprises within the zone.

Three percent goes to the national government and 2 percent to LGUs.

The 2 percent share is divided according to a formula based on population (50 percent), land area (25 percent), and equal sharing (25 percent).

The contiguous communities include the city of Olongapo and the municipalities of Subic, San Antonio, San Marcelino and Castillejos in Zambales, and Morong, Hermosa and Dinalupihan in Bataan. malaya.com.ph