Bureau of Local Government Finance Opinion

June 14, 2011 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Rito I. Placencia Punong Barangay/LIGA President Barangay Hayanggabon Claver, Surigao del Norte Sir : This refers to your request for clarification and resolution regarding the sharing of national wealth taxes pursuant to the guidelines provided for by Joint Memorandum Circular (JMC) No. 2009-1, dated March 31, 2009, of the Department of Finance (DOF), Department of Budget and Management (DBM), Department of the Interior and Local Government (DILG) and Department of Environment and Natural Resources (DENR). As represented, the Taganito Mining Corporation (TMC) has an existing Mineral Production Sharing Agreement (MPSA) with Barangays Taganito, Hayanggabon, Urbiztondo and Cagdianao, all in the Municipality of Claver, Surigao del Sur. Meanwhile, another mining company, the Platinum Group Metals Corporation (PGMC) has an existing MPSA also with Barangays Cagdianao and Hayanggabon. Since the start of operations of the two mining corporations, only Barangays Cagdianao and Taganito received their shares from the national wealth taxes paid, while the other barangays have not received their shares by virtue of the existing MPSA. Hence, your request for clarification on the following matters: 1. Whether or not the barangays covered by the MPSA which have not received any share from the national wealth taxes paid by the mining companies are still entitled to such shares? 2. Who should be the lead agency in the implementation of JMC No. 2009-1 and what should be the proper action of the concerned barangays to claim their tax shares? On the basis of your representation that subject barangays have an existing MPSA as regards the sharing of national wealth taxes paid by the aforementioned mining companies, we therefore hold the view that they should be entitled to their corresponding tax shares by virtue of the existing agreement until the termination thereof. EDSHcT Meanwhile, the aforecited JMC No. 2009-1, which provides the guidelines and procedures in the release of the shares of LGUs from the mining taxes collected by the National Government derived from mining operations, identifies the specific roles and responsibilities of each of the agencies involved, namely, DOF, DBM, DILG and DENR. The release of the mining tax shares is the responsibility of the DBM wherein the barangays concerned should file their claims for payment. Trusting that you are hereby guided properly on the matter. Very truly yours, (SGD.) MA. PRESENTACION R. MONTESA, CESO III Executive Director