FAQs on the Revenue Generation and Wealth Sharing Annex

7/28/2019 FAQs on the Revenue Generation and Wealth Sharing Annex

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Frequently Asked questions on the

Annex on revenue GenerAtion And

WeAlth shArinG oF the

FrAmeWork AGreement on the BAnGsAmoro


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1. Wa ccp r Ga a Wa sag GPh-

milF pac pc? W pa?

Revenue generation and wealth sharing pertain to the sources o wealth creation,

revenues and nancial assistance or the envisioned Bangsamoro political

entity. The Annex identies the means by which the Bangsamoro will nanceits programs and operations. It also provides or the principles and mechanisms

that will be part o the system o scal administration in the Bangsamoro region.

Bangsamoro communities are among the most underdeveloped in the

Philippines due to the decades-long armed conict in the region. The measures

provided in the Annex aim to bridge the nancial gap so that the Bangsamoro

can catch up with the more progressive areas o the country.

With peace and development, it is envisioned that the Bangsamoro will beable to increasingly generate its own revenues, be less dependent on national

government support, and eventually enjoy scal autonomy.

2. A c r Ga a Wa sag A

w c Ppp aw?

Yes, the principle o wealth sharing is a principle embodied in the 1987 Philippine

Constitution.

On NATIONAL ECONOMY & PATRIMONY (Art. XII, Sec.1)

The goals o the national economy are a more ab b

pp, c a wa

On SOCIAL JUSTICE & HUMAN RIGHTS (Art. XIII, Sec. 1)

The Congress shall give highest priority to the enactment o measures that

protect and enhance the right o all the people to human dignity, reduce

social, economic, and political inequalities, and ca b

ab fg wa a pca pw c g.

On LOCAL GOVERNMENT(Art. X, SEC. 7)

Local government shall be entitled to an equitable share in the proceeds o the

utilization and development o the national wealth within their respective areas,

in the manner provided by law

As a matter o act, wealth-sharing provisions are already ound in the 1991 Local


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Government Code and the Organic Act o the Autonomous Region in Muslim

Mindanao (Republic Act 9054).

3. Wa ap r Ga a Wa sag

A FAB a Baga Bac law?

The Revenue Generation and Wealth Sharing Annex is one o the our annexes,

which, together with the FAB, shall comprise the Comprehensive Peace

Agreement between the GPH and the MILF.

The Annex will serve as a guide to the Transition Commission in the drating o

the wealth sharing and revenue generation provisions o the drat Bangsamoro

Basic Law (BBL) that will be submitted to Congress.

4. s wa a ag pw Baga G?

The Bangsamoro shall exercise all powers over taxes and revenue generation

already devolved to the Autonomous Region or Muslim Mindanao (ARMM)

through R.A. No. 9054 and other legislations and issuances, including those

powers and unctions devolved to the ARMM Regional Board o Investments.

In addition to these taxing powers, the Bangsamoro shall also have the power

to levy capital gains tax, documentary stamp tax, donors tax, and estate tax

where all taxable elements are within the Bangsamoro.

5. A aa, wa a ca pw

Baga?

Fees and Charges

The Bangsamoro will have the power to levy ees and charges in connection with

the powers and unctions that it shall exercise.

Grants and Donations

The Bangsamoro may receive grants rom donors, and such grants will be

received by it directly.

Loans, Credits, and Other Forms of Indebtedness

The Bangsamoro shall have the authority to contract loans, credits, and other


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orms o indebtedness with any government or private bank and other lending

institutions. Loans requiring sovereign guaranty would require the approval o

the Central Government.

Other Sources of Revenues

Government income derived rom the operations o Bangsamoro government-

owned and -controlled corporations, nancial institutions, economic zones, and

reeports operating therein shall go to the Bangsamoro Government.

The Bangsamoro may receive grants derived rom economic agreements entered

into or authorized by the Bangsamoro Assembly. These include donations,

endowments, and other orms o aid.

6. Wa Baga bc ga?

The GPH considers this as the most important eature o the new scal arrangement

or the Bangsamoro because it will ree the Bangsamoro government rom the

limitations o the annual budgetary processes whereby the ARMMs budget

allocation is negotiated with Congress every year.

The annual block grant reers to the automatic appropriation that shall be

regularly released to the Bangsamoro Government. The Bangsamoro Basic Law

will provide the ormula that will determine the amount, which in no case be lessthan the last budget received by the ARMM.

The block grant is comparable to the internal revenue allotment (IRA) o local

government units, which is sourced rom the national revenue collections.

7. hw w g b a bw Ca

G a Baga?

On national taxes collected from the Bangsamoro

As to national taxes, ees and charges collected by the

Central Government within the Bangsamoro, 75% shall

be shared with the Bangsamoro and its constituent local

government units while 25% shall remain with the Central

Government. The ARMM currently gets a 70% share.

These national taxes include income taxes, VAT and otherpercentage taxes, but exclude not tari and customs duties.


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On natural resources

Government income derived rom the exploration, development and utilization

o natural resources within the Bangsamoro shall be allocated in the ollowing

manner:

1. For non-metallic minerals (sand, gravel and quarry resources), 100% o the

revenues shall pertain to the Bangsamoro and its constituent local

government units;

2. For metallic minerals, 75% shall pertain to the Bangsamoro while the

remaining 25% shall pertain to the Central Government; and,

3. For ossil uels (oil, natural gas, coal) and uranium, there shall be equal

sharing o government income rom this economic activity.

With regard to the sharing arrangement, the law shall provide a reviewmechanism.

The share o the Bangsamoro rom these government revenues shall include

those or its constituent local government units, and are without prejudice

to royalties that should accrue to indigenous communities as provided in the

Indigenous Peoples Rights Act.

8. hw w pc Ca G pp b

g ?

Revenues rom the additional taxes beyond those already devolved to the

ARMM and the Bangsamoro share in revenues derived rom the exploration,

development, and utilization o natural resources wil l be deducted rom the

amount comprising the annual block grant. This is without prejudice to the just

share o the Bangsamoros constituent local government units in the national

taxes.

These deductions shall be suspended or our years rom the ull operation o the

Bangsamoro.


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This provision on deductions came rom the MILF and reects their aspiration to

be increasingly less dependent on national government support.

9. A ga a wa ag aag

ca?

Yes, all arrangements in the annex are constitutional. They have been ramed

within the bounds and exibilities o the Constitution and other pertinent laws.

Similarly, the Bangsamoro Basic Law, which itsel will undergo the legislative

process rom certication as an urgent bill by the President and passage by

Congress, to the conduct o plebiscite in FAB-identied areas or its ratication,

and the establishment o the Bangsamoro.

10. i a cc a baac/accab ca

a ga b Baga g?

Yes. As provided in the FAB, an Intergovernmental Fiscal Policy Board shall be

created to serve as a mechanism or partnership and coordination between

the Central Government and the Bangsamoro toward building a strong scal

oundation and sustainable development in the region.

Further, the Bangsamoro government shall create its own auditing body that will

have auditing responsibility over public unds utilized by the Bangsamoro. This

is without prejudice to the powers and duty o the national Commission on Auditon the Bangsamoro government.

11. hw ca w a a w c

gw a aab p Baga g?

The Bangsamoro shall ormulate its development plans, consistent with

national development, to address, among others, post-conict rehabilitation,

reconstruction, and development in the region.

The Bangsamoro shall also ensure that the needs o women and men are

adequately addressed in the utilization o public unds. It shall set aside at least

ve percent o ofcial development unds that it receives or support programs

and activities or women based on a gender and development plan.

To ensure environmental sustainability, the Bangsamoro Sustainable

Development Body shall get unding support rom the proceeds o the revenues

collected rom these sources.


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12. hw w aag b Ca G a

c a a w?

These arrangements will acilitate political and scal autonomy which is

important or the Bangsamoro to operate and deliver to its constituents, thereby

contributing to the achievement o peace and progress in the south.

All Filipinos will benet because the peace and developments in the south will

pull the entire nation upwards. With the MILF as partners in government, both

will jointly be able to address other security concerns, opening the door or

bigger trade and tourism opportunities.

13. W r Ga a Wa sag A b

cc Baga g?

Yes. Together with administrative mechanisms to monitor perormance,

assistance rom the Central Government shall also be extended to improve the

capability o the Bangsamoro government to ensure efcient tax administration

and scal management.

The Bangsamoro shall have the power to establish ofces or the assessment and

collection o its taxes.

The Bangsamoro shall observe the principles o uniormity and equity in taxation;no conscatory taxes or ees o any kind may be imposed.

14. Wa a p a gg r Ga a

Wa sag A?

The panels have agreed to convene again ater the Ramadhan to continue

work on the two remaining annexes the Annexes on Power Sharing and

Normalization. They continue to conduct consultations and inormation drive on

the FAB and the Annexes.

The Transition Commission is reconvening to begin work on drating legislation

on parts o the Annex that are already provided or in the signed documents.

Despite some delays, the Government believes that the road map leading to the

rst elected ofcials o the Bangsamoro in 2016 remains viable.

Download the Annex on Revenue Generation and Wealth Sharing o the Framework Agreement on the

Bangsamoro at www.opapp.gov.ph/milf/annexes-framework-agreement-bangsamoro


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FAQs on the Revenue Generation and Wealth Sharing Annex