"Waiver" of the Imposition and Collection of the Mining Taxes on Andesite and Basalt

September 6, 1960 BIR RULING NO. 401-60 The Republic Real Estate Corporation 2nd Floor Magsaysay Building 520 San Luis, Ermita M a n i l a Gentlemen : This is in answer to your letter dated July 5, 1960 wherein you requested this Office to "Waive" the imposition and collection of the mining taxes on andesite and basalt you will extract in accordance with the terms and conditions embodied in the "Mines Temporary Permit No. V-348" issued to you by the Department of Agriculture and Natural Resources. cdi At the outset, it should be stated that this Office is not empowered to waive the collection of taxes imposed by law. The question to be resolved therefore is whether, under the law, the minerals you will extract are subject to, or exempt from, the mining taxes. Your request is premised on the proposition that your mining operation in pursuance of the above-mentioned permit is undertaken by your corporation in its capacity as "Attorney-in-Fact" of Pasay City. Said operation is, therefore, actually an act of Pasay City and the minerals to be mined being for use in its reclamation project may therefore not be subject to tax. We, note, however, that the mining permit was issued in the name of your corporation. There is nothing in the permit which shows that your corporation applied for and secured it for an in behalf of Pasay City. It would follow then that the mining operations, you will conduct pursuant to the said permit is in your own behalf and not of Pasay City. Moreover, Republic Act No. 1899 which authorizes municipalities and cities to reclaim foreshore lands bordering them provides that all reclaimed lands shall be the property of the respective municipality or city and may be leased or sold by them except that portion of the reclaimed area which is necessary for public improvements such as roads, wharves, piers, etc. (Secs. 2 and 4). Said provisions indicates that the reclamation projects undertaken pursuant to the said Act are mainly and essentially proprietary undertakings of the municipalities or cities concerned. It is beyond question that when a chartered city acts in its proprietary capacity it stands on the same footing as private persons subject to tax. Accordingly, granting, arguendo , that your corporation is really an "Attorney-in-Fact" of Pasay City in connection with the latter's reclamation project, the minerals in question are still subject to the corresponding mining taxes. Pending the issuance of the lease, the andesite and basalt you will extract shall be subject to an ad valorem tax of one and one-half per centum of the actual market value of the gross output of said minerals. From the issuance of the lease, your mining operations of said minerals shall be subject to the rentals and royalties provided in Section 242(a)(2) and (b)(3) of the Tax Code. Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue