THE closure and suspension of 28 mine sites across the country will cost 17 affected cities and municipalities in 10 provinces more than P821 million annually in foregone revenues, the Department of Finance (DoF) said on Monday.
Earlier, Finance Secretary Carlos Dominguez 3rd directed local treasurers to submit their respective reports on how the Department of Environment and Natural Resources (DENR) directives could impact on revenues of host local government units (LGU).
Three of the municipalities will lose revenues representing over 50 percent of their current operating income if
the affected mine sites are shut down or forced to suspend operations, according to the Cabinet official.
“One is the municipality of Carrascal (in Surigao del Sur), then you have Tagana-an (in Surigao del Norte) and Tubajon (in Dinagat Islands),” Dominguez was quoted as saying in a recent media forum.
Citing updated estimates submitted by the Bureau of Local Government Finance (BLGF), the DoF noted that Carrascal will lose P198.3 million of mining revenues equivalent to 62.3 percent of total operating income.
Tagana-an will lose P70.3 million or 54 percent of its total operating income and Tubajon will lose P38 million or 55.4 percent of its total operating income if the DENR orders are implemented.
The latest estimate, which is an increase from the P653 million earlier submitted by the BLGF, are based on 100 percent compliance to Dominguez’s directive, the DoF said.
The latest BLGF’s estimates do not include the projected income losses of local governments from the 75 mining contracts or production sharing agreements (MPSAs) the DENR canceled last week, the DoF noted.
The Bureau’s updated estimates on the impact on local finance of LGUs hosting mining firms ordered for suspension and closure by the DENR … constitutes 100 percent compliance of local treasurers ordered to submit [Fiscal Year] 2016 LGU data,” BLGF Acting Executive Director Nino Alvina was quoted as saying in his latest report to Dominguez.
“The total estimated potential revenue loss from the direct payments of mining firms and the shares from mining taxes of affected LGUs amounted to P821.13 million,” Alvina said.
Local collections of affected local governments from mining firms amounted to P340 million, comprising real property taxes (RPTs) of P53.54 million, P263.13 million from business tax, fees, charges and other local charges, and P23.29 million from provincial revenues, the BLGF official noted.
The share of the affected local governments from mining taxes collected by the national government account for P481.17 million, he said.
Local governments collect directly from mining firms operating in their municipalities and cities the following taxes and fees: RPTs, local business tax, mayor’s permit fee, regulatory and administrative fees and occupation Fees.
“The provinces of the affected component municipalities are also imposing governor’s clearance, verification and environmental fees, soil depletion tax, and processing permits for vessel,” he said.