Limitations on the Taxing Powers; Exceptions. – Unless otherwise provided herein, the taxing power of the Bangsamoro Government shall not extend to the following:
(a) Income tax, except when levied on banks and other financial institutions;
(b) Customs duties, registration fees of vessels and wharfage on wharves, tonnage dues, and all other kinds of customs fees, charges, and dues except vessels which are registered by their owners with the Bangsamoro Government and wharfage on wharves construed and maintained by the Bangsamoro Government or its constituent local government units;
(c) Taxes, fees, or charges and other impositions upon goods carried into or out of, or passing through the territorial jurisdiction of the provinces, cities, municipalities, or barangays in the Bangsamoro Autonomous Region in the guise of charges for wharfage, tolls for bridges or otherwise, or other taxes, fees, or charges in any form whatsoever upon such goods or merchandise, except tolls on bridges or roads constructed and maintained by the Bangsamoro Government or its constituent provinces, cities, municipalities, or barangays concerned;
(d) Taxes, fees, or charges on agricultural and aquatic products when sold by marginal farmers or fisherfolk;
(e) Taxes on business enterprises certified by the Board of Investments or by the Parliament as pioneer or non-pioneer for a period of six (6) and four (4) years, respectively, from the date of registration.;
(f) Excise taxes on articles enumerated under the National Internal Revenue Code of 1997, as amended, and taxes, fees, or charges on petroleum products;
(g) Percentage or value-added tax on sales, barters, or exchanges or similar transactions on goods or services except as otherwise provided by national law;
(h) Taxes on the gross receipts of transportation contractors and person engaged in the transportation of passengers or freight by hire and common carriers by air, land or water except as provided in this Organic Law;
(i) Taxes on premiums paid by way of reinsurance or retrocession;
(j) Taxes, fees, or other charges on Philippine products actually exported, except as otherwise provided by law enacted by the Congress of the Philippines;
(k) Taxes, fees, or charges on countryside and barangay business enterprises and cooperatives duly registered under Republic Act No. 6810, otherwise known as the “Magna Carta for Countryside and Barangay Business Enterprises,” and Republic Act No. 6938, otherwise known as the “Cooperative Code of the Philippines,” as amended; and
(l) Taxes, fees, or charges of any kind on the National Government, its agencies and instrumentalities, and local government units except on government-owned or controlled corporations or entities that are primarily organized to do business.
However, where all taxable elements are within the Bangsamoro territorial jurisdiction, the Parliament may impose the following taxes to the exclusion of the Bureau of Internal Revenue of the National Government:
(1) Capital Gains Tax. – Tax imposed on the gains presumed to have been realized by the seller from the sale, exchange, or other disposition of real properties , classified as capital assets, including pacto de retro sales and other forms of conditional sale;
(2) Documentary Stamp Tax. – Tax on documents, instruments, loan agreements, and papers evidencing the acceptance, assignment, sale, or transfer of the obligation, right or property incident thereto;
(3) Donor’s Tax – Tax on a donation or gift that is imposed on the gratuitous transfer of property between two (2) or more persons who are living at the time of the transfer. It shall apply whether the transfer is in trust or otherwise, whether the gift is direct or indirect, and whether the property is real or personal, tangible or intangible; and
(4) Estate Tax. – Tax on the right of the deceased person to transmit to the lawful heirs and beneficiaries of the deceased person at the time of death and on certain transfers, which are made by law as equivalent to testamentary disposition.
In case the Parliament does not impose the abovementioned taxes, the Bureau of Internal Revenue of the National Government shall continue to levy and collect said taxes; Provided, That if the Bangsamoro Government shall impose them, the tax rates shall be pursuant to the National Internal Revenue Code of 1997, as amended: Provided, further, That in no case shall the abovementioned taxes be imposed and collected by both the Bureau of Internal Revenue and the Bangsamoro Government.
The Intergovernmental Fiscal Policy Board shall promulgate rules on the determination of taxable elements in relation to taxes (1) to (4) above, and the sharing of revenues from the collection of such taxes where the taxable elements are both situated within and outside of the Bangsamoro territorial jurisdiction. Any dispute between the National Government and the Bangsamoro Government arising from the imposition of the above taxes shall be resolved by the Intergovernmental Fiscal Policy Board.
