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LGUs assured of faster remittance of mine tax share |
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Ported from Business World Online Article by Neil Jerome C. Morales
LGUs assured of faster remittance of mine tax share
LOCAL GOVERNMENT units (LGUs) should now get their share from mining taxes faster, as a result of a new joint circular issued by the departments of Finance (DoF), the Environment and Natural Resources (DENR), Budget and Management (DBM), and Interior and Local Government (DILG), a DENR statement yesterday read.
Under Joint Circular No. 2009-1, issued last March 31, the departments target to release LGUs’ share in mining taxes quarterly, and no longer once a year as currently practiced.
Under the new set up:
* The DILG will submit to the Bureau of Internal Revenue (BIR) the list of all extraction sites of nonmetallic mineral products like sand, gravel, and limestone;
* DENR’s Mines and Geosciences Bureau will provide the BIR the estimated volumes and values of metallic mineral production of mining companies for the current year;
* The Finance department will submit to DBM the projected mining tax to be collected for the current year in order to ensure adequate allocations are included in the budget.
The amount local governments hosting mining operations will get, however, will be based on the actual amount of tax collected.
"What the locals [government] will get is the actual [amount of tax collected]," Environment Secretary Jose L. Atienza, Jr. said in a phone interview yesterday.
"What is important is LGUs will get their share quarterly."
Under the Local Government Code, the national government and the local government of the area that hosts mining operations share the 2% excise tax derived from mineral sales on a 60%-40% basis, respectively.
The LGU share, in turn, is divided into 20% for the province, 45% for the municipality and 35% for the host barangay.
LGU shares from mining activities in highly urbanized or independent component cities are divided 65% for the city and 35% for the barangays.
"[The faster excise tax remittance] would help convince LGUs that mining activities can be welcomed in their areas because it takes years before LGUs get their shares," Nelia C. Halcon, executive vice-president of the Chamber of Mines of the Philippines, said in a phone interview.
Gerardo V. Calderon, deputy secretary general of the League of Municipalities of the Philippines, concurred.
"The LGUs were against mining companies because the properties were already mined out, but it takes a few more years before shares are given to us," said Mr. Calderon.
"With the faster release of mining tax, LGUs can quickly use funds for their basic services," he added.
DENR’s Mr. Atienza admitted that "[slow remittance of share in mining taxes] is one of the reasons why LGUs are not committed to mining "now, LGUs will be more supportive [of mining activities]."
"We need an attractive place for investors and we need the LGU support to get the money," Mr. Atienza added.
The government pushed back to 2013 its target of attracting $10-$11 billion investment to the mining sector from 2011, given the economic crisis that has made it more difficult for mining firms to get funds.
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