Bureau of Local Government Finance Opinion

March 21, 2000 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully returned to the Regional Director for Local Government Finance, Region XI, Helen K. Lee Building, corner Juan Luna and Juan dela Cruz Sts., Davao City, his letter dated May 7, 1999 requesting clarification on the following: 1. Who is the official responsible for the issuance of permit to extract sand and gravel and other quarry resources within the territorial site of a component city? 2. What is the correct distribution of proceeds from sand and gravel extracted also within the territorial site of a component city? Said clarification is being sought in the light of the approval of City Tax Ordinance No. 98-04, series of 1998 of the Island Garden City of Samal by the Sangguniang Panlalawigan of Davao del Norte wherein Section 17 of said Tax Ordinance grants exclusively the issuance of permit to extract sand, gravel and other quarry resources to the City Mayor and the proceeds thereof to be distributed as follows: 1. Component City where the sand and gravel and other quarry resources are extracted Sixty percent (60%); and 2. Barangay where the sand, gravel and other quarry resources are extracted Forty percent (40%). ESTCDA That Office contends that the above provisions ran counter to the provisions of Section 138 of the Local Government Code of 1991 (LGC), quoted hereunder: "SEC. 138. Tax on Sand, Gravel and Other Quarry Resources. . . . . "The permit to extract sand, gravel and other quarry resources shall be issued exclusively by the provincial governor, pursuant to the ordinance of the sangguniang panlalawigan. The proceeds of the tax on sand, gravel and other quarry resources shall be distributed as follows: (1) Province Thirty percent (30%); (2) Component City or Municipality where the sand, gravel, and other quarry resources are extracted Thirty percent (30%); and (3) Barangay where the sand, gravel, and other quarry resources are extracted Forty percent (40%)." Independent Component Cities as defined under Section 451 of the LGC "are those component cities whose charters prohibit their voters from voting for provincial elective officials. Independent cities shall be independent of the province." In view of the above, it may be stated that a component city shall serve as part of and be governed by the province where the said city is located. Hence, in reply to Query No. 1, it is clear that the Provincial Governor shall have the exclusive power to issue permit to extract sand, gravel and other quarry resources within the territorial jurisdiction of the Province and its component cities. Had it been the intention of Congress to give component cities the power to issue permit to extract sand, gravel and other quarry resources, then it would not have included component cities to share in the distribution of the proceeds of the tax herein referred to under Section 138 of the LGC. AEDHST With regard to Query No. 2, the proceeds of the tax on sand, gravel and other quarry resources shall be distributed pursuant to the provisions of Section 138 aforequoted. Accordingly, this Bureau concurs with the stand of that Office that subject provisions of City Tax Ordinance No. 98-04 ran counter to the provisions of Section 138 of the LGC. (SGD.) ANGELINA M. MAGSINO Deputy Executive Director Officer-in-Charge <http://www.blgf.gov.ph/downloads/opinion/localtax/2000/a1999-0506.pdf> last visited on October 2, 2013.