Mining closures, suspensions to cost LGUs over P650M

By Audrey Morallo (philstar.com)
Updated February 8, 2017 – 4:11pm
http://www.philstar.com/business/2017/02/08/1670264/mining-closures-suspensions-cost-lgus-over-p650m

Based on an initial report by the Bureau of Local Government Finance, the DOF said that losses in taxes, fees and other charges collected by the LGUs from mining companies are estimated at P441.92 million.

Meanwhile, the losses of LGUs arising from their share in mining taxes collected by the national government are pegged at P211.72 million.

“The total estimated potential revenue loss of the affected LGUs from all sources, based on 2015 data, amounts to P653.64 million,” the executive director of the BLGF, Nino Alvina, said.

According to the BLGF, 10 provinces would be affected by the closures and suspensions, and these are: Benguet, Nueva Vizcaya, Palawan, Cebu, Bulacan, Zambales, Eastern Samar, Dinagat Islands, Surigao del Norte and Surigao de Sur.

BGLF based its estimates on 2015 data because reports for 2016 are not due until March 31.

BLGF sourced its data from initial estiamtes by LGU treasurers and their electronic Statements of Receipts and Expenditures (SREs) that now includes data on earnings from mining and other extractive activities.

According to Alvina, LGUs collect the following taxes and fees from mining firms in their jurisdictions: real property tax (RPT), local business tax, mayor’s permit fee, regulative and administrative fees and occupation fees.

In addition, affected component municipalities collect governor’s clearance, verification fee, environmental fees, soil depletion tax and processing permits for vessel, Alvina said.

According to the BLGF, the order of the DENR would cost concerned LGUs P43.97 million in RPTs while losses in business taxes and other fees are estimated at P358.56 and provincial revenues at P39.9 million.

Alvina said that for RPTs collected by cities, the LGU gets a 70 percent share while the remaining money is share by the barangays. Fifty percent of the share of barangays goes to the directly affected village while the remaining half is equally shared by component barangays.

In the case of RPTs collected by provinces, according to Alvina, the province gets a 35 percent share while 40 percent is remitted to the municipality and the remaining 25 percent is given to the barangay(s) where the mining site is operated.

Regarding their share in mining taxes collected by the national government, Alvina said that preliminary data showed that affected LGUs stood to lose P211 million or 43 percent of their total share from national government tax collections.

Finance Secretary Carlos Dominguez III recently ordered local treasurers of affected LGUs to assess the impact of the mine closures and suspensions on their finances.

Dominguez said that aside from the massive job losses and its effect on the national economy the order of the DENR might imperil the fiscal state of concerned LGUs because a hefty amount of tax revenues of these LGUs comes from mining firms.

The assessment of the local treasurers should help the government in crafting a comprehensive strategy to address the impact of the DENR order on the employment and fiscal health of affected communities.