Abolishing the Use of Community Tax Certificate

TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES ) First Regular Session 25 JU. 14 A10:54 SENATE S. No. - Introduced by Senator Francis G. Escudero AN ACT ABOLISHING THE USE OF COMMUNITY TAX CERTIFICATE AND THE POWER TO LEVY COMMUNITY TAX, REPEALING FOR THE PURPOSE THE PERTINENT PROVISIONS OF REPUBLIC ACT NO. 7160, AS AMENDED, OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991 EXPLANATORY NOTE The history of the community tax certificate or cedula, then known as residence tax and residence certificate, brings incarnations of our country's colonial past. First implemented as a 19th century tax reform in the Philippines during the Spanish colonial times, following the abolition of the tribute system, the cedula was issued to all Filipinos, then called indios, upon payment of a residence tax. The cedula would later on play a significant role in Philippine Revolution when Andres Bonifacio together with his fellow Katipuneros tore up their cedulas in defiance of Spanish rule in a meeting in Balintawak, known as the Cry of Pugadlawin that signaled the beginning of Philippine Revolution. Today, however, with the identification of other sources of local revenues, the share of community tax in local government revenues has shrunk to insignificant amounts. Along with the increasing use of passport and tax identification numbers in official government transactions, the lack of means and willingness to verify under- declaration of income and non-procurement of community tax certificates has further eroded community tax collections. As a result, payment of community tax "had almost

become a voluntary matter" according to the seminal paper of Caro in the National Tax Research Journal entitled "Background on the Community Tax." This bill, symbolic it may seem, abolishes the community tax certificate system, primarily its use as a form of identification as when, among others, a Filipino acknowledges a document before a notary public, takes an oath of office or is appointed to a government position. It is submitted that the cedula as a primary form of identification has lost its significance and value. If at all, the cedula only serves as a mere relic of our country's colonial past. Consequently, the pertinent provisions of the Republic Act No. 7160, the Local Government Code of 1991, as amended, are proposed to be repealed, which carry over the provisions imposing residence tax then found in Commonwealth Act No. 465 and the Local Tax Code of 1973, and mandate the use of community tax certificates as a primary form of identification. In view of the foregoing, the passage of the measure is earnestly sought. FRANCIS G. ESCUDERO

TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES ) First Regular Session JUL 14 A0 334 SENATE P.:. S. No. - Introduced by Senator Francis G. Escudero AN ACT ABOLISHING THE USE OF COMMUNITY TAX CERTIFICATE AND THE POWER TO LEVY COMMUNITY TAX, REPEALING FOR THE PURPOSE THE PERTINENT PROVISIONS OF REPUBLIC ACT NO. 7160, AS AMENDED, OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991 Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

Section 1. Repealing Clause. - Sections 156 to 164, Article VI, Title I, Book 11,

3 Chapter 2 of Republic Act No. 7160 are hereby repealed. All laws, presidential decrees, executive orders, proclamations and/or 5 administrative regulations which are inconsistent with the provisions of this Act are 6 hereby amended, modified, superseded or repealed accordingly.

Sec. 2. Implementing Rules and Regulations. - The Secretaries of Finance,

8 Budget and Management and the Interior and Local Government, and the presidents of the local leagues shall promulgate the required rules and regulations for the speedy and effective implementation of this Act.

Sec. 3. Effectivity Clause. - This Act shall take effect fifteen (15) days from its

publication in at least two newspapers of national circulation. Approved,