Tax Plan For Muslim Mindanao Prepared

The Department of Finance (DOF) is leading the preparation of the Tax Administration Transition Plan for the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), which includes establishing a digitalized tax system for efficient payment and collection of revenues in the region.

The BOL states that the BARMM shall enjoy fiscal autonomy and have the power to create its sources of revenue, as provided by the law. I Photo: Bangsamoro Autonomous Region in Muslim Mindanao (BARMM)

“In line with our ‘Taxpayer First’ policy, this plan ensures a seamless and efficient transition for all taxpayers in BARMM. BARMM holds a unique advantage by building a comprehensive digital system now, as they are starting from scratch. They can learn from and avoid the mistakes that the national government encountered. They can go straight to digital,” said Finance Secretary Ralph G. Recto.

“We fully support the success of this transition as efficient and effective tax administration is crucial to the genuine development and fiscal autonomy of BARMM, as well as to our inclusive growth as a nation,” he added.

The Intergovernmental Fiscal Policy Board (IFPB) approved the creation of an Operational Working Group (OWG) to lead the crafting of the Tax Administration Transition Plan during the 7th National Government-Bangsamoro Government Meeting on September 3, 2024.

The IFPB is co-chaired by Finance Secretary Recto and Bangsamoro Government Minister of Finance, Budget and Management (MFBM) Ubaida C. Pacasem. The Board was created under the Bangsamoro Organic Law (BOL) to address revenue imbalances and fluctuations in the region's financial needs and revenue-raising capacity.

The BOL states that the BARMM shall enjoy fiscal autonomy and have the power to create its sources of revenue, as provided by the law.

A Tax Study Group (TSG) was formed by the IFPB in May 2020 to address these issues, including the creation of the Bangsamoro Revenue Code to ensure the region’s long-term sustainability.

As the chair of the TSG, the DOF-Revenue Operations Group (ROG) is leading discussions on the Tax Administration Transition Plan.

This plan covers the transfer of tax administration functions from the Bureau of Internal Revenue (BIR) to the Bangsamoro Revenue Office (BRO), including sharing BIR’s registration and other relevant systems following the enactment of the Bangsamoro Revenue Code.

Composed of DOF-ROG, the BIR, and MFBM-BARMM, the TSG will conduct regular meetings and submit two proposed guidelines by September for review by the IFPB.

To date, the TSG reported that it has completed 80% of its deliverables for the BOL, including guidelines on the share of national taxes, fees, and charges collected in the BARMM, and the implementing rules and regulations for the payment of national internal revenue taxes by corporations, partnerships, or firms.