BIR Ruling

September 1, 1967 2nd Indorsement Returned to the Chief, Accounting Division, thru the Revenue Operations Head, Management & Planning Department, the herein attached papers bearing on the request of that Office for a legal interpretation of the provisions of Republic Act No. 4793 under which the Bureau of Mines is claiming 100% of the BIR collections of royalties on mines, in lieu of the 10% of the total mining taxes (of which royalties on mineral products is one) as provided for by Republic Act No. 406. cdti The question to be resolved is the correct interpretation of the conflicting provisions of Republic Act No. 1510 and Republic Act No. 4793. Section 2 of Republic Act No. 4793 provides, viz.: "SEC. 2. This fund shall consist of ten per centum of the total mining taxes paid to the Government and all royalties or participation except ad valorem tax received by the Government in the exploitation, processing and disposition of minerals in government mineral reservations administered by the Secretary of Agriculture and Natural Resources and/or the Director of Mines, which fund shall be set aside at the beginning of each fiscal year and shall be placed at the disposal of the Secretary of Agricultural and Natural Resources for the purpose enumerated in Section one hereof." Section 1 of Republic Act No. 1510 provides viz. "SEC. 246. Definitions of the terms gross output", "minerals" and "mineral products" . Disposition of royalties and ad valorem taxes . xxx xxx xxx Ten per centum of the royalties and ad valorem taxes herein provided shall accrue to the municipality and ten per centum to the province where the mines are situated, and eighty per centum to the National Treasury. (As amended by Sec. 1, Republic Act No. 834; Sec. 1, Republic Act No. 1299; Sec. 1, Republic Act No. 1510.)" cdt In the light of the abovequoted provisions of law, the Mines Special Fund shall consist of the following: (a) 100% of all the royalties derived from government mineral reservations; and (b) 10% of all the royalties derived from all other mineral lands and of the ad valorem taxes derived from all mineral lands except government mineral reservations. For purposes of Section 246 of the Tax Code, the balance in (b) above shall be distributed as follows: llcd (a) 10% municipality; (b) 10% province; and (c) 80% National Government (SGD.) MISAEL P. VERA Commissioner of Internal Revenue September 1, 1967 2nd Indorsement Returned to the Chief, Accounting Division, thru the Revenue Operations Head, Management & Planning Department, the herein attached papers bearing on the request of that Office for a legal interpretation of the provisions of Republic Act No. 4793 under which the Bureau of Mines is claiming 100% of the BIR collections of royalties on mines, in lieu of the 10% of the total mining taxes (of which royalties on mineral products is one) as provided for by Republic Act No. 406. cdti The question to be resolved is the correct interpretation of the conflicting provisions of Republic Act No. 1510 and Republic Act No. 4793. Section 2 of Republic Act No. 4793 provides, viz.: "SEC. 2. This fund shall consist of ten per centum of the total mining taxes paid to the Government and all royalties or participation except ad valorem tax received by the Government in the exploitation, processing and disposition of minerals in government mineral reservations administered by the Secretary of Agriculture and Natural Resources and/or the Director of Mines, which fund shall be set aside at the beginning of each fiscal year and shall be placed at the disposal of the Secretary of Agricultural and Natural Resources for the purpose enumerated in Section one hereof." Section 1 of Republic Act No. 1510 provides viz. "SEC. 246. Definitions of the terms gross output", "minerals" and "mineral products" . Disposition of royalties and ad valorem taxes . xxx xxx xxx Ten per centum of the royalties and ad valorem taxes herein provided shall accrue to the municipality and ten per centum to the province where the mines are situated, and eighty per centum to the National Treasury. (As amended by Sec. 1, Republic Act No. 834; Sec. 1, Republic Act No. 1299; Sec. 1, Republic Act No. 1510.)" cdt In the light of the abovequoted provisions of law, the Mines Special Fund shall consist of the following: (a) 100% of all the royalties derived from government mineral reservations; and (b) 10% of all the royalties derived from all other mineral lands and of the ad valorem taxes derived from all mineral lands except government mineral reservations. For purposes of Section 246 of the Tax Code, the balance in (b) above shall be distributed as follows: llcd (a) 10% municipality; (b) 10% province; and (c) 80% National Government (SGD.) MISAEL P. VERA Commissioner of Internal Revenue