Section 7Sec./Art. 7

Extent of Tax Powers; Exceptions. - Unless otherwise provided herein, the taxing power of the regional government and of the provinces, cities, municipalities, and barangay located therein shall not extend to the following:

(a)Income tax, except when levied on banks and other financial institutions;

(b)Documentary stamps tax;

(c)Taxes on estate, inheritance, gifts, legacies, and other acquisitions mortis causa, except as otherwise provided by law;

(d)Customs duties, registration fees of vessel and wharfage on wharves, tonnage dues, and all other kinds of custom fees, charges, and dues except vessels which are registered by their owners with the Regional Government and wharfage on wharves constructed and maintained by the Regional Government or the local government unit concerned;

(e)Taxes, fees, or charges and other impositions upon goods carried into or out of, or passing through the territorial jurisdictions of the provinces, cities, municipalities, or barangay of the 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 provinces, cities, municipalities, or barangay concerned or by the Regional Government.

(f)Taxes, fees, or charges on agricultural and aquatic products when sold by marginal farmers or fisherfolk;

(g)Taxes on business enterprises certified by the Board of Investments or by the Regional Assembly as pioneer or non- pioneer for a period of six (6) and four (4) years, respectively from the date of registration;

(h)Excise taxes on articles enumerated under the national internal revenue code, and taxes, fees, or charges on petroleum products;

(i)Percentage or value-added tax (VAT) on sales, barters, or exchanges or similar transactions on goods or services except as otherwise provided by law;

(j)Taxes on the gross receipts of transportation contractors and persons engaged in the transportation of passengers or freight by hire and common carriers by air, land, or water except as provided in this Organic Act;

(k)Taxes on premiums paid by way of reinsurance or retrocession;

(l)Taxes, fees, or other charges on Philippine products actually exported, except as otherwise provided by law enacted by the Congress;

(m)Taxes, fees, or charges on countryside, barangay business enterprises and cooperatives duly registered under Republic Act No. 6810, the "Magna Carta for Countryside and Barangay Business Enterprises" and Republic Act No. 6938, the "Cooperatives Code of the Philippines," respectively; and

(n)Taxes, fees, or charges of any kind on the central government or 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.