A ‘TAX wizard’ former lawmaker has claimed the national government owes local government units some P449 million worth of Internal Revenue Allotment.

Former Negros Oriental Rep. Herminio Teves said that the amount is the Value Added Tax collection of the Bureau of Customs but kept out of LGU’s reach since 1989.   

Teves, who was chair of the House Committee on Ways and Means during the 13th Congress, said the unpaid IRA comprised the 40 percent share of LGUs from value added tax collection from 1989 to 2009 alone.

The veteran  solon made this revelation as he supported the contention of several incumbent congressmen led by Batangas Rep. Hermilando Mandanas that VAT collected by the BOC should be considered part of the total collected national taxes to which LGUs have a share under the provisions of the Local Government Code.

“There is no provision in the Customs and Tariff Code that mandates the BOC to collect VAT.  This duty is exclusively mandated to the Bureau of Internal Revenue,” Teves said. 

“Therefore, the BOC could have only been delegated by the BIR to collect for the revenue agency VAT on ‘vatable’ imports,” he added

He explained that LGU’s are denied their share of the BOC-collected VAT because the national government considers such collections as “theirs and not credited to BIR”, just like the Custom’s collection of excise tax.

“VAT collected by BOC is not recorded as BIR collect and yet the VAT paid to the BOC is accepted by BIR as input VAT when said imported items are sold locally or used by ‘vatable firms,” Teves stressed.

He cited as an example the VAT on capital equipment imports paid by telecommunications firms.  The VAT paid to the BOC is applied as input VAT by BIR on the sales of the firms that are subject to VAT.

“Considering that the national government, through the Department of Budget Management only gives the IRA to LGU from BIR revenue collections, the LGU’s IRA share is doubly hit,”  he said.

Teves said that VAT collected by the BOC from 1989 to 2009 has totalled P1.1 billion and the supposed 40 percent  IRA amounting to P449 million.