BARMM Internal Revenue Share: How the Bangsamoro Share Is Computed

The Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) is entitled to a 70% share of national internal revenue collections generated within its territory, while the National Government retains 30%. This sharing applies to collections from taxpayers other than National Government Agencies (NGAs) and to withholding tax payments of NGAs coursed through a Tax Remittance Advice. During a five-year transition period, however, the Regional Government receives the National Government's remaining share as an allotment, effectively giving the region 100% of collections within BARMM.

The rules trace back to Revenue Regulations No. 4-98, which originally implemented a 60-40 split under the 1987 Organic Act for the Autonomous Region in Muslim Mindanao (ARMM), and were later amended by Revenue Regulations No. 5-2003 under the expanded ARMM.

The 70-30 sharing rule explained

Under Revenue Regulations No. 5-2003, the Bureau of Internal Revenue (BIR) and other collecting officers remit the 70% share of the ARMM in national collections from businesses operating in the region through the Regional Treasurer. The remaining 30% share of the National Government goes to the Bureau of the Treasury through the nearest Authorized Government Depository Bank branch for payments made through Revenue Official Receipt, or directly to the Bureau of the Treasury for withholding tax payments made through Tax Remittance Advice.

This amended the earlier 60-40 arrangement under Revenue Regulations No. 4-98, which had set a 30% provincial share, a 30% regional share, and a 40% national share.

What counts as a national collection

Revenue Regulations No. 5-2003 defines national collection as the collections in the ARMM of internal revenue taxes, fees and charges, and taxes imposed on natural resources. The sharing rule therefore applies to internal revenue taxes collected within the region — not to customs duties or other national levies outside that definition.

The five-year transition: when the region keeps 100%

The same regulations provide that, for a period of five years as may be provided in the Annual Appropriations Act, the allotment to the Regional Government of the National Government's remaining share of all current-year internal revenue tax collections within the ARMM results in the region receiving 100% of collections, with a zero share for the National Government.

The allotment begins only after its inclusion in the Annual Appropriations Act. After the five-year period, the sharing reverts to the standard 70-30 split.

How the VAT incremental revenue share is computed

Separately, the region shares in the National Government's 80% share of yearly incremental revenue from value-added tax collections within the ARMM. Under Revenue Regulations No. 5-2003, the 50% share of the ARMM from that 80% is computed and certified by the BIR for transmittal to the Department of Budget and Management.

That amount is then divided within the region:

• Twenty percent (20%) accrues to the city or municipality where the taxes are collected; and
• Eighty percent (80%) accrues to the Regional Government.

Which areas are covered

Revenue Regulations No. 5-2003 applies the remittance rules to the provinces and city comprising the expanded ARMM: Sulu, Tawi-Tawi, Lanao del Sur, Maguindanao (except Cotabato City), Marawi City, and Basilan province (excluding Isabela City), per Commission on Elections Resolution No. 4561 promulgated August 28, 2001.

The mechanics of remittance

Two payment channels govern collections. Withholding tax payments of NGAs are made through a Tax Remittance Advice, a serially numbered document attached to every withholding tax return, certified by the agency's Chief Accountant and approved by its head or duly authorized representative. All other internal revenue tax payments are made through the issuance of a Revenue Official Receipt by authorized Revenue Collecting Officers.

The BIR transmits a copy of the monthly certification of Tax Remittance Advice collections under the ARMM, covering the period within five days after the end of each month, to the Regional Treasurer. It also computes and certifies the 70% share of the ARMM from collections made through Tax Remittance Advice for transmittal to the Department of Budget and Management.

Frequently asked questions

How much is the BARMM share in internal revenue collections? Seventy percent (70%) of national collections within the region goes to the BARMM, while thirty percent (30%) goes to the National Government. During the five-year transition period covered by the Annual Appropriations Act, the region receives 100%.

How is the BARMM share from VAT computed? The region receives 50% of the National Government's 80% share of yearly incremental VAT collections within the ARMM. Of that amount, 20% goes to the city or municipality where the taxes are collected and 80% goes to the Regional Government.

Who remits the BARMM share? The BIR and other collecting officers remit the regional share through the Regional Treasurer, while the National Government share goes to the Bureau of the Treasury.

Practical takeaways

• The standard sharing is 70% to the region and 30% to the National Government for internal revenue collections within the BARMM.
• During the five-year transition provided in the Annual Appropriations Act, the region receives the National Government's share as an allotment — effectively 100%.
• The VAT incremental revenue share gives the region 50% of the National Government's 80%, split 20% to the collecting local government and 80% to the Regional Government.
• Withholding tax payments of NGAs use a Tax Remittance Advice; other internal revenue payments use a Revenue Official Receipt.
• The rules originated in Revenue Regulations No. 4-98 and were amended by Revenue Regulations No. 5-2003 for the expanded ARMM.

Primary sources

The rules discussed above are drawn from the following issuances, embedded here in full for your reference.

RR No. 05-2003 — Implements the remittance of the shares/allotment from certain internal revenue taxes to the following provinces/city comprising the expanded Autonomous Region in Muslim Mindanao (ARMM): Sulu, Tawi-Tawi, Lanao del Sur, Maguindanao (except Cotabato City), Marawi City and Basilan Province (excluding Isabela City) Digest | Full TextOpen in Law LibraryDownload PDF

RR No. 04-98 — Implements the provision of RA No. 6734 relative to the proportionate share of the provinces comprising the Autonomous Region in Muslim Mindanao (ARMM) in the national collections from businesses DigestOpen in Law LibraryDownload PDF

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.