Publishing Republic Act No. 6110, Amending Among Others Sections 241, 242, 243 and 248, all of Title VII, National Internal Revenue Code

February 11, 1970 REVENUE MEMORANDUM CIRCULAR NO. 10-70 SUBJECT : Publishing Republic Act No. 6110, Amending Among Others Sections 241, 242, 243 and 248, all of Title VII, National Internal Revenue Code TO : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, there is quoted hereunder the pertinent sections of Republic Act No. 6110, amending certain sections of Title VII of the National Internal Revenue Code, as amended, relating to mining taxes, viz.: " Republic Act No . 6110 " An Act Amending Provisions of the National Internal Revenue Code , as Amended " Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled : xxx xxx xxx "SEC. 46. Section two hundred and forty-one of the same Act is hereby amended to read as follows: "SEC. 241. Occupation Fee . A locator, holder, or occupant of any mining claim shall pay to the Commissioner of Internal Revenue in advance, upon the expiration of the period of two years from the date of the registration of the claim in the Office of the Mining Recorder, and on the same date every year thereafter, an annual occupation fee of two pesos a hectare or fractional part thereof, until the lease covering the mining claim shall have been granted. Fifty per centum of all the fees collected under this section shall accrue to the province, and fifty per centum to the municipality in which the mining claims are located: Provided , That in case the mining claims are located in a chartered city, the full amount shall accrue to the city concerned. Failure to pay the occupation fee herein required within thirty days after demand shall cause the mining claims to be opened to relocation and lease by other persons qualified to locate and lease the same under the provisions of the Mining Act, in the same manner as if no location of the said mining claims had ever been made, unless the locator, holder, occupant, his heirs, executors, administrators or legal representatives, shall have paid the delinquent occupation fees and have resumed occupation of the claims before relocation by other persons. "No lease shall be granted on any mining claim until the occupation fees required to be paid under this section shall have been fully paid: Provided , however , That nothing herein contained shall be construed to extend the period of four years within which application for lease of mining claim shall be filed from the date of the recording of the claim in the Office of the Mining Recorder, as provided for in the Mining Act." "SEC. 47. Section two hundred and forty-two of the same Act is hereby amended to read as follows: "SEC. 242. Rentals and royalties on mineral lands under lease . For the privilege of exploring, developing, mining, extracting, and disposing of the minerals from the lands covered by lease, there is hereby imposed upon the lessee rentals and royalties as follows: "(a) Rentals. "(1) On coal-bearing public lands, an annual rental, five pesos per hectare or fraction thereof for each and every year for the first ten years, and ten pesos per hectare or fraction thereof for each and every year thereafter during the life of the lease. Rental for any year shall be credited against the royalties as they accrue for that year as provided in subsection (b) hereof: Provided , That such rental and royalties paid during any year shall be credited against the specific tax provided for in Section one hundred forty-three. "(2) On all mineral lands of the first, second, fourth and fifth groups provided under the Mining Act, two pesos a hectare or fraction thereof. The rental shall be paid in advance to the provincial, city, or deputy provincial treasurers on the date of the granting of the lease and on the same date every year thereafter during the life of the lease. Fifty per centum of all the rentals collected shall accrue to the province, and fifty per centum to the municipality in which the mining claims are located: Provided , That in case the mining claims are located in a chartered city, the full amount shall accrue to that city. "(b) Royalties. "(1) On coal, such royalties as may be specified in the lease, which shall not be less than twenty centavos a ton of one thousand and sixteen kilograms. "(2) On gold, a royalty of one and one-half per centum of the actual market value of the annual gross output thereof. "(3) On all other minerals, extracted from, or mineral products of, mineral lands of the first, second, fourth, and fifth group as provided in the Mining Act, a royalty of two per centum of the actual market value of the gross output thereof. "Before the minerals or mineral products are removed from the mines, the Commissioner of Internal Revenue or his representatives shall first be notified of such removal on a form prescribed for the purpose. "The rentals and royalties at the rates herein established or at such rates as hereafter may be prescribed by law shall be paid by the lessee and a provision to this effect shall be deemed to be a part of every contract of lease covering the mineral lands and mineral products referred to in this section." "SEC. 48. Section two hundred and forty-three of the same Act is hereby amended to read as follows: "SEC. 243. Ad valorem taxes on output of mineral lands not covered by lease . There is hereby imposed on the actual market value of the annual gross output of the minerals or mineral products extracted or produced from all mineral lands not covered by lease, an ad valorem tax in the amount of two per centum of the value of the output, except gold which shall pay one and one-half per centum . "Before the minerals or mineral products are removed from the mines, the Commissioner of Internal Revenue or his representatives shall first be notified of such removal on a form prescribed for the purpose." "SEC. 49. Section two hundred and forty-eight of the same Act is hereby amended to read as follows: "SEC. 248. Specific Penalties . Anyone liable to make a return of the actual market value of the output of mines or to pay the royalties or ad valorem taxes required in section two hundred forty-five, who refuses or neglects to file such return, or to pay such royalties or ad valorem taxes at the time or times specified therein; and any lessee, owner, or person in charge of any minerals or mineral products upon which the royalties or ad valorem taxes imposed in this Title are applicable, who removed, in violation of the first paragraph of said section, or who allows or procures the unlawful removal from the place where mined of any such products, upon which the royalties or ad valorem taxes have not been paid; and any person who abets or aids in the unlawful removal of minerals or mineral products, shall be fined not more than five thousand pesos and imprisoned for not more than three years. "Any one required by this Title to make, render, or file a return of the actual value of the output of mines, who makes, renders, or files a false or fraudulent return with intent to defeat or evade the payment of the royalties or ad valorem taxes, as the case may be shall be fined not more than ten thousand pesos and imprisoned for not more than five years." xxx xxx xxx "SEC. 68. Effectivity Clause . This Act shall take effect on September 1, 1969: Provided , That where at the time of death or within six months thereafter no schedule of values as provided in Section 19 of this Act has been fixed in the areas where the properties of the decedent are located, the assessed values as shown in the tax rolls shall be considered as the fair market value, unless the contrary is shown: Provided , further , That the provisions of Sections 6, 11, 12, 13, 14 15, and 16 of this Act shall apply to the entire taxable year in which this Act is approved; Provided , still further , That the provisions of Sections 76 and 77 of this Act shall be effective on July 1, 1970: Provided , finally , That the second paragraph of Section 358 as amended by this Act, shall be effective only for a period of four years from July 1, 1969 unless extended. "Approved, August 4, 1969 . . ." FEATURES OF THE AMENDMENTS 1. SEC. 241. Occupation Fee . The changes involve the increase in the amount of the annual occupation fee from P1.00 to P2.00 a hectare or fractional part thereof. 2. SEC. 242. Rentals and royalties on mineral lands under lease . The amendment involves increase of rentals and royalties: (a) Rentals . (1) On coal-bearing public lands, the annual rental was increased from P2.50 (old rate) to P5.00 per hectare or fraction thereof for each and every year for the first ten years; and from P5.00 (old rate) to P10.00 per hectare or fraction thereof for each and every year thereafter during the life of the lease; and (2) On mineral lands of the 1st, 2nd, 4th and 5th groups, from P1.00 (old rate) to P2.00 per hectare or fraction thereof. (b) Royalties . (1) On coal, such royalties as may be specified in the lease which shall not be less than P0.20 a ton of 1,016 kilograms, instead of P0.10 prior to the amendment; (2) On gold, there is no change; and (3) on all other minerals, extracted from, or mineral products of, mineral lands of the 1st, 2nd, 4th, and 5th groups, a royalty of from 1% (old rate) to 2% of the actual market value of the gross output thereof. 3. SEC. 243. Ad valorem taxes on output of mineral lands not covered by lease . The amount of tax is increased from 1% of the value of the output (old rate) to 2% except gold which shall be subject to 1%. 4. SEC. 248. Specific Penalties . The penalties for violation of certain provisions of the mining taxes mentioned in the first paragraph of the section shall be a fine of not more than P5,000 and imprisonment for not more than three years, instead of a fine of not more than P1,000 or imprisonment for not more than six months, or both, as provided before the amendment. The violations under the second paragraph is punishable by a fine of not more than P10,000 and imprisonment for not more than five years, instead of a fine of not more than P4,000 or imprisonment for not more than one year or both, as provided for before the amendment. Effectivity The amendments to Sections 241, 242, 243 and 248, all of Title VII, National Internal Revenue Code, shall be effective on September 1, 1969. Enforcement All internal revenue officers and others concerned are hereby enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cdt MISAEL P. VERA Commissioner of Internal Revenue APPROVED: CESAR VIRATA Acting Secretary of Finance