THE Department of Budget and Management (DBM) has released P233.8 million to cover the 40-percent share of local government units (LGUs) from excise taxes collected from the mining industry between December 2011 and the fourth quarter of 2014. During the period, total collection from mining taxes reached P585 million.
Budget Secretary Florencio B. Abad said the funds should be directly credited to the accounts of the recipient provinces, municipalities and barangays.
“We have issued the allotment and corresponding cash
allocation for the release of the lawful share of LGUs in the proceeds from the utilization and development of minerals in their respective areas. The funds are now released based on the joint certification of mining tax collections issued by the Bureau of Internal Revenue and the Treasury, as well as the schedule of the corresponding shares of recipient LGUs,” Abad said in a press statement.
Abad added that the funds released are charged against the P1.5 billion appropriated for the purpose in the current year’s national budget. The proceeds from the share of LGUs shall be appropriated by their respective Sanggunian to finance local government and livelihood projects.
The DBM press release listed the Caraga region to have received the largest share, in the amount of P100.5 million. Caraga
hosts several mining projects producing various mineral commodities, including gold, copper, chrome, nickel, iron and limestone.
The other regions with large shares include Region 7, with P29.2 million; Region 2, with P27.3 million; Region 4B, with P22.2 million; and the Cordillera Administrative Region, with P21.7 million.
The regions with the lowest shares are Regions 11 and 6, with P52,440 and P95,300.76, respectively.
The 40-percent share from gross collection derived from national wealth, such as from mining, royalties, forestry and fishery charges within an LGU’s juisdiction, is mandated under the local government code. Ideally, the national wealth tax is to be derived from the collection of the preceding year, but takes years to be fulfilled.
In the past, this prompted Baguio City Mayor Mauricio Domogan to file a bill for direct remittance to the LGU during his term as city representative in Congress, saying then that the setup of the shares having to pass through the national government is not effective, as most LGUs do not receive their shares. He cited Benguet province at that time, which had been deprived of its shares from the operations of mining companies for many years.
Domogan cited the system used with special economic zones, where LGUs collected directly from their share from the locators. Domogan’s bill was passed in the lower house, but the Senate did not act on it.
Eventually, Sen. Aquilino Pimentel Jr. expanded the proposed bill of Domogan in his “Bigger Pie, Bigger Slice” bill, amending Republic Act 7160, for the expansion of the tax base from which the sharing is computed. If approved, this would increase the 40-percent national wealth-tax share of LGUs to 50 percent.
Philex Mining Corp., Lepanto Consolidated Mining Co. and Benguet Corp. are three big mining companies operating in the Cordillera region, all in Benguet. Irisan Lime Project holds a mineral processing permit and Mountain Rock Aggregates and ML Carantes operate industrial gravel-and-sand companies.