Solons push passage of wealth taxes’ direct remittance to LGUs

By Dexter A. See

BAGUIO CITY – The congressional representatives of this city and nearby Benguet province urged Congress to approve their bills mandating companies to directly remit to concerned local governments their 40 percent share from the national wealth tax being paid to the national government.

The congressmen said this was in line with the recent pronouncement of President Benigno Aquino the Cordillera will get its share from resources being extracted in the region,

Baguio City Rep. Bernardo M. Vergara and Benguet Rep. Ronald M. Cosalan, principal authors of the direct remittance bill, said the stand of the President regarding the benefits of the Cordillera on the extraction of its rich mineral resources is a direct certification that the proposed law is one of the priorities of his administration.

For this, they said the same must be acted upon so local governments hosting companies involved in the exploitation, development and utilization of resources will be compelled to directly remit to local governments their 40 percent share from the national wealth taxes being paid for such purpose.

Section 90 of the Local Government Code of the Philippines mandates companies exploiting, utilizing and developing resources to pay national wealth tax to the national government wherein host communities are entitled to 40 percent share from the same.

Because of red tape, the lump sum amount is first remitted to the national treasury before local governments are apportioned their share which will only be released upon the identification of projects where the funds will be utilized.

Cosalan and Vergara said delayed release of the share of the host communities for several years deprives the barangays, municipalities and provinces opportunity to implement high impact projects deliver basic services to the people.

Under the bill, companies involved in mining, hydro plant operations among others are mandated to give to the local governments their 40 percent share from the national wealth taxes they are supposed to pay while the remaining 60 percent will be the only one to be given to the national treasury.

The bill was approved by the House of Representatives in the 14th Congress with former Rep. Mauricio G. Domogan (now Baguio mayor) as its principal author but the Senate failed to come out with the required counterpart bill until it was overtaken by the conduct of the national elections.

Cordillera plays host to a number of large-scale mining companies and several big, medium and small hydroelectric power plants being operated by multinational companies but development in host communities are still slow because their national wealth tax shares are directly remitted to the national coffers.