A special mining study urged government to increase the share of local governments and allow mining companies to pay local government units directly.
This was among the key recommendations presented in a recent round-table discussion on a special study titled “Mining in the Philippines: Problems and Suggested Solutions.”
The study was commissioned by the Stratbase ADR Institute and authored by Dr. Carlo Arcilla, the new director of the Philippine Nuclear Research Institute and a professor of the National Institute of Geological Sciences of the University of the Philippines.
The study points out that revenues from excise taxes on mining “should be shifted substantially towards the LGUs (more than 30 percent) and away from national government.”
“The LGUs bear the brunt of the impacts of mining, and they should proportionately share more in the sharing of tax revenues. This is an application of subsidiarity in the distribution of needs. The sharing itself, even more important than the actual [revenue sharing], must be done immediately, so as to have temporal cadence in the disturbance of mining and its benefits to the people most affected,” the study adds.
Arcilla cited the ongoing problem of the delayed remittance of Internal Revenue Allotments or IRAs to LGUs, which has been documented to be as long as ten years and “gives the wrong impression to residents and local political leaders who have to answer to their electorate.”
The paper recommends further: “An exemption should be studied and granted to companies similar to that granted to firms in special economic zones that are allowed to pay taxes directly to the local government units. A solution. hopefully done by executive order, is to permit mining companies to directly pay LGUs their share of the excise tax, and also to increase the LGUs share of the excise tax.”
Dr. CP David, trustee of Stratbase ADR Institute, supported Arcilla’s forward-looking position, adding there already are world-class mining operations that are going beyond what is required by laws and can serve as success models in responsible mining operations, with sustainability projects integrated with the needs of their communities.
The forum was attended by representatives from government, academe, environmental groups and the mining industry.
Stratbase ADRi will share the study to key policy leaders in both Houses of Congress, the executive, the DENR, CSOs and industry stakeholders.