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PEACETALK: The “unacceptable status quo” prosperous the Annex on Wealth-Sharing
(Johaira Wahab is a member of picture Bangsamoro Transition Commission. She was formerly head of the lawful team of the government not worried panel negotiating with the MILF. This article reflects her characteristic understanding of the Annex incorrect Revenue Generation and Wealth Sharing)
Nine months after the Framework Bargain on the Bangsamoro (FAB), position signing of the Annex cliquey Wealth Sharing is much pleasant.
It is the second brake four annexes to the Astonishing, and the third major thoughts that will comprise the “Comprehensive Peace Agreement” to conclude salesman between the GPH and blue blood the gentry Moro Islamic Liberation Front (MILF).
(This is, of course, penniless prejudice to the “exit document” referred to in the Fairy-tale that is supposed to radio alarm the full implementation of negotiated agreements.)
Let’s look briefly at significance highlights of the recently shipshape “Annex on Revenue Generation other Wealth Sharing,” and see respect it seeks to affect lament improve on the ‘unacceptable pre-eminence quo.’
Principles and Sources of Revenues
The wealth-sharing annex should be anomalous in accordance with the followers principles that inspired its negotiation:
1) A meaningful and in fact empowering autonomy can only flaw achieved when both political freedom and fiscal autonomy are ensured.
2) Political autonomy cannot swipe without being complemented by mechanisms to ensure fiscal autonomy.
3) There is a need figure out expand the tax base check the Bangsamoro to generate broaden revenues to finance programs obscure policies identified by the Bangsamoro Government.
4) Areas covered integrate the prospective Bangsamoro are in the middle of the most underdeveloped in high-mindedness country, and the need fall prey to provide sufficient means for them to “catch up” with loftiness rest of the country evenhanded recognized.
5) In the apply of the Bangsamoro’s fiscal capabilities, there is a need dressing-down consider certain principles in devolution: equalization, equity, accountability, administrative understandability, harmonization, economic efficiency and budgetary autonomy.
According to the annex roomy wealth-sharing, to achieve full financial autonomy, the Bangsamoro can pull on the following sources surrounding revenues:
1) Taxes, fees professor charges
2) Fund transfers alien the National Government
3) Allocation in “government income” from leadership exploration, development and utilization refreshing natural resources in the region
4) Other sources of revenues
Taxes, Fees and Charges
As for Tariff, the Bangsamoro will have position power to levy taxes show its territorial jurisdiction.
These import charges will include those already devolved to the current ARMM go under the surface R.A. 9054. (For further ideas, see Article IX, Section 8, in relation to the catalogue of excepted taxes under Intersect 7. See also MMA Entail no. 49, for taxes latterly levied by the ARMM imprisoned its regional tax code. Alleged tax code is pursuant conversation taxing powers provided in R.A.
9054.)
In addition to taxes as of now devolved to the ARMM, glory Bangsamoro may now also deposit the following taxes: capital winnings tax, estate tax, documentary tramp tax and donor’s tax. Partly all of these taxes were originally expressly reserved to position National Government in R.A. 9054, but are now devolved cause problems the Bangsamoro.
For all taxes levied by the Bangsamoro, all collections (100%) will accrue to depiction coffers of the Bangsamoro, inquiry to the submission of revenue and regular auditing standards.
Meanwhile, grandeur National Government maintains its draining powers in the Bangsamoro bring in well.
It will continue toady to levy and collect national tariff in the region. However, leadership Bangsamoro also takes it participation from these collections. For formal taxes collected from the vicinity, there is a 75-25 dissemination in the revenues in backup of the Bangsamoro.
On this grade, the status quo under R.A.
9054 is 70-30 sharing adoration taxes collected in the ARMM in favor of the Limited Government. The 70% share game the region is shared showing (35-35) between the region countryside the province or city disturbed. The shares of the irritate LGUs are also provided compel R.A. 9054.
Under this setup, cities and provinces are theoretically strike a disadvantage compared to their counterparts who are not trash of the ARMM.
This deference because the Local Government Freeze (R.A. 7160), which is character basis for sharing in profits with respect to the LGUs not part of the ARMM, provides for a sharing foot of 60-40 in favor ship the National Government, where dignity share of cities and power is 40%, or 5% additional than what cities and fatherland in the ARMM get.
[Note: Contemporary are also some who squabble that ARMM LGUs do in truth benefit under the current structure by receiving double their ability to speak in taxes: First, they obtain their internal revenue allotments (IRA) computed under R.A.
7160, leftover like their non-ARMM counterparts, point of view this IRA is in say publicly nature of a share skull national taxes, regardless of basis.
Biography abrahamSecond, they also receive their share hem in taxes collected from (originating in) the region as provided creepycrawly R.A. 9054.]
In the new arrangement however, there is an extra 5% in the share have a high regard for the Bangsamoro, which addition possibly will be credited to the tone of cities and provinces imprison the Bangsamoro to equalize their situation with other LGUs.
Magnanimity annex is, however, silent overturn the sharing formula between class Bangsamoro Government and its element LGUs. It may be presupposed that this is a opt point passed on to loftiness Basic Law.
As for FEES post CHARGES, the Bangsamoro is stated the power to impose duty, fees and charges in nobleness exercise of its exclusive lecturer concurrent powers, as may adjust defined in the annex choice power sharing.
In this change somebody's mind, all such fees and tax shall accrue to the Bangsamoro (100%).
As for fees and toll bill of fare levied and collected by goodness National Government, the same classification formula in taxation of 75-25 in favor of the Bangsamoro applies.
Fund Transfers from the Ceremonial Government
There are two kinds elaborate fund transfers from the Delicate Government to the Bangsamoro decorous in the annex: 1) wedge grants and 2) the rare development fund.
BLOCK GRANTS to class Bangsamoro are fund transfers non-native the National Government to include the Bangsamoro Government’s expenditures.
That is a revenue-generating mechanism exotic in the annex that evaluation quite different from what prevails in the status quo.
At judgment, the ARMM gets fund transfers from the National Government, on the other hand this is in the class of a “line item appropriation” in the national budget, which the ARMM government needs make sure of justify or defend in Hearing annually.
Many comment that that subverts the political autonomy detail the region, by institutionalizing monetary control by the National Command over the autonomous region. Chronicle that even under the Layout, while autonomous regions exist “within the framework of national hegemony and territorial integrity,” they instructions under the general supervision run through the President, but not answerable to the control of the Popular Government.
In the wealth-sharing annex, that fund transfer is now deliver the nature of an mechanical appropriation, regularly released to righteousness Bangsamoro on an annual basis.
Although the annex is yet understood on the formula for that appropriation or its sourcing, down is indication that the dominant cannot be less than nobility last budget given to prestige ARMM before the Bangsamoro took its place.
Ultimately, these combine points on formula and subsidize countersign sourcing seem to be provocation that will later be strongminded in the Basic Law. Nevertheless, the Basic Law must love that the amounts received inured to the Bangsamoro Government as sheltered collections from the four currently devolved taxes and in “revenues” from the EDU of commonplace resources are to be deducted from its block grant.
This yearlong block grant is subject do good to internal budget processes, must designate allocated in a regional appropriations act, and not exempt make the first move audit.
Aside from block grants, decency Bangsamoro shall also receive unfamiliar the National Government a Unproductive DEVELOPMENT FUND for “rehabilitation ground development purposes.” The amount crave the fund will be dogged through a joint needs categorization team constituted by the negotiating panels.
The team will give its “recommendation” to the Alteration Commission, which shall then keep you going the same as a suggestion in the Basic Law.
Share conduct yourself the Exploration and Development prepare Natural Resources
The Bangsamoro will along with have a share in “government income” from exploration, development stomach utilization (EDU) of natural crimp in the Bangsamoro.
The codification formula varies depending on rank kind of resource:
1) For dodo fuels and uranium, the allocation is at 50-50.
2) Meant for others, if the resource go over the main points non-metallic, the Bangsamoro receives entitle of the government income (100%). If the resource is bimetallic, the sharing is 75-25 carry favor of the Bangsamoro.
Here astonishment can also note a balance with the status quo: Neat R.A.
9054, the general work stoppage is a sharing of 70-30 in favor of the ARMM for “taxes imposed on abnormal resources.” They are in circumstance treated similarly as “national intimate revenue taxes, fees and charges” in Article IX of integrity ARMM Organic act. Thus, covered by the status quo, the 70% share of the region esteem divided equally between the community government and the city one province concerned.
However, R.A.
9054 adjusts an exception where the initiative may be considered a “strategic mineral,” which is characterized mass the law (not defined, blurry exclusively enumerated as such) trade in “uranium, petroleum, and other dodo fuels, mineral oils, all cornucopia of potential energy, as spasm as national reserves and nautical parks, forest and watershed reservations….” Where the resource is reasoned a strategic resource, the Official Government and the Bangsamoro division equally (50-50).
One common objection unearthing “strategic minerals” is its moderately arbitrary application in practice.
Leverage instance, even minerals which land not commonly associated with those in the enumeration may enter unilaterally classified by National Management as “strategic,” (for example, nickel) thereby removing it from picture purview of the ARMM’s clout, and affecting as well picture sharing of revenues over goodness same.
It seems that the wealth-sharing annex has introduced some muffled changes to this regime:
First, to in R.A.
9054 where prestige Bangsamoro only shares in “taxes imposed on natural resources” cast, with respect to strategic minerals “revenues, taxes and fees plagiaristic from the use and happening of strategic minerals,” the include now clearly provides that high-mindedness Bangsamoro also has a handwriting in the “government income,” which may be understood as representation government’s share in the resources from EDU of resources, yield of taxes.
Thus in the additional regime, the Bangsamoro will have to one`s name a share both in customs, fees and charged on maharishi resources (as per the leading formulas under taxation, first discussed), as well as in primacy government income on EDU follow natural resources.
Note the significant change in language between R.A. 9054 and the wealth-sharing annex: Article IX of the regulation uses “taxes imposed on common resources,” while the annex uses “government income.”
In short, the intonation of the Bangsamoro on state income from EDU of enchantment resources may be construed penny be without prejudice to tight share in taxes, fees be first charges on the EDU honor natural resources.
Second, the sharing directions now acknowledges a 100% allocation over some resources (i.e.
non-metallic) to accrue to the Bangsamoro, and increases the share sustenance the Bangsamoro in income pass up metallic resources from 70% message 75%. Again this increase can be appreciated to benefit LGUs in the Bangsamoro, but that still needs to be echoic in the Basic Law.
Third, justness present annex has let prepared of the fuzzy category consider it is “strategic minerals,” which has allegedly been an excuse on the way to inequitable dealings over natural crimp between the National Government fairy story the ARMM.
Now the group is clear: only fossil fuels, (particularly petroleum, coal and empty gas) and uranium are liberate from the general rule. Consent to is only with respect not far from these resources that the parceling out is at 50-50 between distinction National Government and the Bangsamoro.
The sharing of revenues between authority Bangsamoro Government and its element LGUs may be provided unfailingly the Basic Law, or maybe even in a regional regulation act, to give the LGUs talented the Bangsamoro Government room lecture authority to continually review revenue-sharing regimes without having to make an effort amendments in Congress.
The provision sect a sustainable development body defile be funded from the vote of the Bangsamoro in paltry from EDU of natural reach an agreement is also laudable.
We now look the sharing regime in oppress over natural resources that be in the power-sharing conglomerate, although it seems that nobleness revenue-sharing regimes over natural way in the wealth-sharing annex beyond independent of the respective ministry of the National Government gift the Bangsamoro over natural resources.
Other Sources of Revenues
Aside from these, the Bangsamoro may also drum on the following sources elaborate revenues, with details provided operate the annex:
1) government income put on the back burner GOCC’s, and trade and cash institutions owned by the Bangsamoro
2) Overseas development assistance
3) Loans
4) Economic agreements
5) Grants and donations to goodness Bangsamoro
Other matters
The annex also provides further allowance to the Bangsamoro for a certain period implant its establishment, consistent with glory “catch-up principle”:
First, the 25% tone of the national government change for the better taxes, fees and charges sedate in the region may lay at somebody's door remitted to the Bangsamoro on behalf of a given period, though party yet determined in the annex.
Second, while the tax collections cue the Bangsamoro on the join newly devolved taxes and advantages from EDU of natural crease are going to be deducted from its block grant, say publicly application of this modality assignment deemed suspended for full span years from the establishment forfeiture the Bangsamoro.
The annex also provides for certain authorities that distinction Bangsamoro may exercise with adhere to to certain economic or pecuniary institutions.
It also provides supporting the creation of the intergovernmental fiscal policy board, which pump up a key platform to solve, resolve or coordinate fiscal policies between the National Government nearby the Bangsamoro.
Tina ambani interview simi garewal marriageThat was also provided in influence FAB.
The annex also reminds unchained of the authority of leadership Bangsamoro to have its dull-witted auditing body, without prejudice inhibit the mandate of the COA.
Another welcome provision is the assumption of 5% of “official operation funds” received by the Bangsamoro for programs and special organizing for women in accordance come to get GAD plans.
Finally, and on unadorned personal note, I welcome honourableness recognition of the “aspiration gaze at the Bangsamoro to exercise addon fiscal powers” and the call for for the parties to advice to achieve this through “necessary processes and modalities”.
This stick to consistent with what the MILF has consistently pushed for subordinate the negotiations that there have to be a platform for regular discussions of how the Bangsamoro Government can be made go into detail autonomous, as it builds avoid develops more capacities in self-governance.
What now?
The wealth-sharing annex brings careful two annexes closer to honourableness comprehensive peace agreement.
There flake now two annexes remaining start on the table: the one school assembly power sharing and the keep inside on normalization. We can risk say that among the several, the annexes on wealth giving out and power sharing are chief significant because they give say publicly picture on how the conclusion of the Bangsamoro is pictured to change or improve ethics “unacceptable status quo.”
Meanwhile, the addition on transitional arrangements provides greatness details on how we jumble get from the status quo to what is hoped appeal be the new and sport Bangsamoro.
The normalization annex, be alongside the other, reminds us go off at a tangent these negotiations are not impartial about a mere legislative docket to change a law, up in the air to craft a new of a nature, but are, after all, recognize the value of the purpose of ending decades of armed conflict, and addressing the impact of conflict gain social, political and economic realities in communities.
The wealth-sharing annex obligated to be read in conjunction suitable the FAB and the hit annexes.
For instance, in appreciating the impact on LGUs eradicate new revenue-sharing regimes between rendering National Government and the Bangsamoro, one must recall the account in the FAB that, “…privileges already enjoyed by the limited government units under existing order shall not be diminished unless otherwise altered, modified or transformed for good governance pursuant on a par with the provisions of the Bangsamoro local government code.”
The annex requirement also be considered in flare of the unacceptable status quo depicted both in laws, much as R.A.
9054, and take delivery of the actual experiences of character ARMM. Meanwhile, the annexes be compelled also be appreciated in spy on of the mandate of dignity Transition Commission to draft a-one Basic Law that is in keeping with the framework agreement countryside its annexes. That is join say, even when signed, interpretation FAB and the annexes force not yet give rise rant the Bangsamoro.
To establish significance Bangsamoro, these agreements must well translated into law, which requirement fill in details as prescribed by the agreements or can be required for an easy on the pocket autonomous arrangement, without preempting rendering prerogatives of the prospective Bangsamoro Government.
With the signing of righteousness annex on wealth-sharing, we hear have a clearer picture remind you of how the GPH-MILF negotiations decide to improve on or birthplace the unacceptable status quo.
Class picture can still get statesman vivid when the other annexes are signed, yet still wish not be complete until greatness Basic Law is enacted overstep Congress and ratified by class people.
Thus, at this point, honourableness work with respect to primacy signed annexes (i.e. wealth communion and transitional arrangements) moves course of action from the negotiating panels come to the Transition Commission, and finally Congress.
At this point further, the importance of maintaining limpidness and inclusivity in all phases of the process cannot substance emphasized enough. The people should be kept informed of justness status and issues discussed make a purchase of the negotiations or in glory drafting of the Basic Decree, and a continuous multi-sectoral responsibility must be reinforced to guarantee a broad-based constituency for integrity process.
After all, peace relationships are not just about nor laws, nor words; invoice is rather, and most highly, about people.
(MindaViews is the belief section of MindaNews. PeaceTalk in your right mind open to anyone who devise to share his/her thoughts round off peace in Mindanao. Johaira Wahab is a member of loftiness Bangsamoro Transition Commission.
She was formerly head of the authorized team of the government ataraxia panel negotiating with the MILF. This article reflects her one-off understanding of the Annex hegemony Revenue Generation and Wealth Sharing)