Bureau of Local Government Finance Opinion

July 9, 1998 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully referred to the Commissioner, Bureau of Internal Revenue, Quezon City (Attention: The Service Chief, Financial and Management Service), for the favor of appropriate action, the letter dated July 2, 1998 of the Municipal Mayor of Aroroy, Masbate, relative to the attached computation of Mine Output and the corresponding Mine Product Tax payable by Atlas Consolidated Mining and Development Corporation (ACMDC) for Calendar Years 1991 to 1993. It is noted in a letter dated February 21, 1994 copy also attached, of the Vice-President and MGO Resident Manager of ACMDC, addressed to Sangguniang Bayan Member Nestor Naguna of said municipality that the total Mine Product Tax payable by said corporation amounted to P82.331M as of December 31, 1993 which as alleged by said ACMDC official will be treated by that Bureau as an automatic offsetting of Value-Added Tax refunds. In this connection, Section 291 and 292 of the Local Government Code of 1991 (RA 7160) are quoted hereunder: "SEC. 291. Share of the Local Governments from Any Government Agency or Government- Owned and -Controlled Corporation . Local government units shall have a share based on the preceding fiscal year from the proceeds derived by any government agency or government- owned or -controlled corporation engaged in the utilization and development of the national wealth based on the following formula whichever will produce a higher share for the local government unit: (a) One percent (1%) of the gross sales or receipts of the preceding calendar year; or cTCEIS (b) Forty percent (40%) of the mining taxes, royalties, forestry and fishery charges and such other taxes, fees or charges, including related surcharges, interest, or fines the government agency or government- owned or -controlled corporation would have paid if it were not otherwise exempt." "SEC. 292. Allocation of Shares . The share in the preceding Section shall be distributed in the following manner: (a) Where the natural resources are located in the province: (1) Province Twenty percent (20%); (2) Component City/Municipality Forty-five percent (45%); and (3) Barangay Thirty-five percent (35%). Provided, however, That where the natural resources are located in two (2) or more provinces, or in two (2) or more component cities or municipalities or in two (2) or more barangays, their respective shares shall be computed on the basis of: (1) Population Seventy percent (70%); and (2) Land Area Thirty percent (30%) xxx xxx xxx". Advice of the action taken hereon direct to the party concerned, copy furnished this Bureau, will be highly appreciated. IcDCaT (SGD.) ANGELINA M. MAGSINO Deputy Executive Director Officer-in-Charge