SEVENTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
)
Second R egular Session 
)
SENATE
Senate Bill No. 1 5 4 1
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RECEIVED bV;
Intro d u ce d  by Senator Juan M iguel Zubiri
AN ACT
INCREASING THE EXCISE TAX ON NONMETALLIC AND METALLIC MINERALS 
AND MINERAL PRODUCTS, AND QUARRY RESOURCES, AMENDING FOR THE 
PURPOSE SECTIONS 151 AND 287 OF THE NATIONAL INTERNAL REVENUE 
CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES
E xplanatory Note
The rate of excise tax imposed on minerals and quarry resources has been 
historically pegged at no more than 5%. 
In the case of nonmetallic minerals and 
quarry resources, there was an imposed 1.5% excise tax based on the actual value of 
the gross output from 1939 to 1977, which was increased to 3% until 1994. For metallic 
minerals, the rate was gradually increased from 1.5% to 5% in 1977. 
However, the 
excise tax rates were reduced in 1994 to 1% for copper and other metallic minerals and 
2% for gold and chromite. At present, the rate of tax imposed on both metallic and 
nonmetallic minerals is set at 2% of the actual market value of the anuual gross output. 
The excise tax rate has remained unadjusted since Republic Act No. 7729 was passed in 
1994.
This bill proposes to increase the excise tax on minerals, mineral products and 
quarry resources from the uniform rate of 2% to 7%. Furthermore, the bill proposes an 
equal share between the national government and local government from the excise tax 
on minerals, mineral products and quarry resources. The bill further provides that the 
fifty percent from the revenue collection that shall accrue directly to the local 
government units and must be allocated and utilized for infrastructure, education, 
health insurance and environmental conservation.
The provisions of this bill ensures that the government receives a fair share from 
mining revenues in the form of taxes to make certain that affected local communties 
are compensated from the health impact, and enviornmental and social costs of mining 
activities.
In view of the foregoing, immediate passage of the bill is sought.
MIGUEL F. ZU BIR I


SEVENTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
)
Second Regular Session 
)
SENATE
Senate Bill No. 1541
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AUG-2  
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RfcCEiVLL) BY. P
Introduced by Senator Juan Miguel Zubiri
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AN ACT
INCREASING THE EXCISE TAX ON NONMETALLIC AND METALLIC MINERALS 
AND MINERAL PRODUCTS, AND QUARRY RESOURCES, AMENDING FOR THE 
PURPOSE SECTIONS 151 AND 287 OF THE NATIONAL INTERNAL REVENUE 
CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House o f Representatives o f the Philippines in 
Congress assembled:
Section 1. Section 151 (A) of the National Internal Revenue Code, as amended, 
is hereby amended to read as follows:
"SEC. 151. Mineral Products. -
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"(A) Rates o f Tax. - There shall be levied, assessed and collected on 
minerals, mineral products and quarry resources, excise tax as follows:
"(1) On coal and coke, a tax of Ten pesos (PIO.OO) per metric ton;
"(2) On all [nonmetallic] minerals, MINERAL PRODUCTS, and quarry 
resources, a tax of [two] SEVEN percent [(2% )] (7%) based on the actual 
market value of the gross output thereof at the time of removal, in the 
case of those locally extracted or produced; or the value used by the 
Bureau of Customs in determining tariff and customs duties, net of excise 
tax and value-added tax, in the case of importation.
"Notwithstanding the provision of paragraph [(4)] (3) of Subsection (A) of 
this Section, locally extracted natural gas and liquefied natural gas shall 
not be subject to the excise tax imposed herein.
"[(3) On all metallic minerals, a tax based on the actual market value of 
the gross output thereof at the time of removal, in the case of those


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locally extracted or produced; or the value used by the Bureau of Customs 
in determining tariff and customs duties, net of excise tax and value-added 
tax, in the case of importation, in accordance with the following schedule;]
"[(a) Copper and other metallic minerals; ]
"[(i) On the first three (3) years upon the effectivity of Republic Act 
No. 7729, one percent (1% );]
"[(ii) On the fourth and the fifth years, one and a half percent 
(1 1/2%); and]
"[(iii) On the sixth year and thereafter, two percent (2% );]
"[(b) Gold and chromite, two percent (2% ).]
"[(4)] (3) On indigenous petroleum, a tax of three percent (3%) of the fair 
internationai market price thereof, on the first taxable sale, barter, 
exchange or such similar transaction, such tax to be paid by the buyer or 
purchaser before removal from the place of production. The phrase 'first 
taxable sale, barter, exchange or similar transactiori means the transfer of 
indigenous petroleum in its original state to a first taxable transferee. The 
fair international market price shall be determined in consultation with an 
appropriate government agency;
X X X.
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SEC 2. Section 287 of the National Internal Revenue Code, as amended, is
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hereby amended to read as follows:
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"SEC. 287. Shares o f Local Government Units In the Proceeds from the 
Development and Utilization o f the National Wealth. -  x x x
"(A) Amount o f Share o f Local Government Units. - Local government units 
shall, in addition to the internal revenue allotment, have a share of forty percent 
(40%) of the gross collection derived by the national government from the 
preceding fiscal year from [excise taxes on mineral products,] royalties, and such 
other taxes, fees or charges, including related surcharges, interests or fines, and 
from its share in any co-production, joint venture or production sharing


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"(B) REVENUE FROM MINERALS, MINERAL PRODUCTS AND QUARRY 
RESOURCES. THE REVENUE COLLECTED FROM THE EXCISE TAX ON MINERALS, 
MINERAL PRODUCTS, AND QUARRY RESOURCES UNDER SECTION 151 OF THIS 
ACT SHALL BE EQUALLY DIVIDED BETWEEN THE NATIONAL GOVERNMENT AND 
THE LOCAL GOVERNMENT UNITS WHERE THE MINERAL, MINERAL PRODUCTS 
AND QUARRY RESOURCES ARE EXTRACTED. FIFTY PERCENT (50%) OF THE 
REVENUES COLLECTED SHALL ACCRUE TO THE NATIONAL GOVERNMENT AND 
REMAINING FIFTY PERCENT (50%) SHALL BE DIRECTLY REMITTED TO THE 
LOCAL GOVERNMENT UNITS.
"PROVIDED, THAT THE FIFTY PERCENT (50%) SHARE OF LOCAL GOVERNMENT 
UNITS FROM THE REVENUE COLLECTED FROM THE EXCISE TAX ON MINERALS, 
MINERAL PRODUCTS, AND QUARRY RESOURCES SHALL BE ALLOCATED AND 
USED EXCLUSIVELY FOR THE FOLLOWING PURPOSES:
"(1) 
HIRING 
OF 
TEACHERS, 
CONSTRUCTION, 
REPAIR 
AND 
REHABILITATION OF CLASSROOMS, ACQUISITION OF TABLES AND 
CHAIRS, PURCHASE OF TEXTBOOKS, TEACHERS' MANUALS AND OTHER 
INSTRUCTIONAL MATERIALS;
"(2) CONSTRUCTION OF HOSPITALS AND RURAL HEALTH FACILITIES, 
AND ACQUISITION OF HOSPITAL EQUIPMENTS AND MEDICINES; AND
"(3) INFRASTRUCTURE PROJECTS SUCH AS BUT NOT LIMITED TO THE 
CONSTRUCTION OF ROADS, BRIDGES, DAMS, WATER SUPPLY SYSTEM 
AND IRRIGATION PROJECTS;
"(4) ENVIRONMENTAL CONSERVATION PROGRAMS SUCH AS BUT NOT 
LIMITED TO REFORESTATION AND BIODIVERSITY CONSERVATION 
PROGRAMS AND PROJECTS.
"[(B)] (C; Share o f the Local Governments from Any Government Agency 
or Government-owned or -Controlled Corporation. - Local Government Units shall 
have a share, based on the preceding fiscal year, from the proceeds derived by 
any government agency or government-owned or controlled corporation engaged
agreement in the utilization and development of the national wealth within their
territorial jurisdiction.


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"(1) One percent (1%) of the gross sales or receipts of the preceding 
calendar year, or
"(2) 
Forty percent (40%) of the [excise taxes on mineral products,] 
royalties, and such other taxes, fees or charges, including related 
surcharges, interests or fines the government agency or government- 
owned or -controlled corporations would have paid if it were not otherwise 
exempt: PROVIDED HOWEVER, THAT LOCAL GOVERNMENT UNITS SHALL 
HAVE FIFTY PERCENT (50%) SHARE FROM THE EXCISE TAX collected ON 
MINERALS, MINERAL PRODUCTS, AND QUARRY RESOURCES UNDER 
SECTION 151 OF THIS ACT.
"[(C)] (D) Allocation o f Shares. - The share in the preceding Section shall 
be distributed in the following manner:
"(1) Where the natural resources are located in the province:
"(a) Province - twenty percent (20%)
"(b) Component city/municipality - forty-five percent (45%); and
"(c) Barangay - thirty-five percent (35%)
"Provided, however. That where the natural resources are located 
in two (2) or more provinces, or in two (2) or more component cities or 
municipalities or in two (2) or more barangays, their respective shares 
shall be computed on the basis of: (1) Population - seventy percent 
(70%); and (2) Land area - thirty percent (30%).
"(2) Where the natural resources are located in a highly urbanized or 
independent component city:
"(a) City - sixty - five percent (65%); and
"(b) Barangay - thirty - five percent (35%)
"Provided, however. That where the natural resources are located 
in two (2) or more cities, the allocation of shares shall be based on the
in the utilization and development of the national wealth based on the following
formula, whichever will produce a higher share for the local government unit:


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formula on population and land area as specified in subsection [(C)] (D)(1) 
hereof.
SEC 3. Implementing Rules and Regulations. The Secretary of Finance shall, 
upon the recommendation of the Commissioner of Internal Revenue, promulgate not 
later than thirty (30) days upon the effectivity of this Act the necessary implementing 
rules and regulations.
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SEC. 4. Repealing Clause. - All laws, orders, issuances, circulars, lUleS and
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regulations or parts thereof, which are inconsistent with the provisions of this Act are
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hereby repealed or modified accordingly.
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SEC. 5. Separability Clause. -  If any provision of this Act is subsequently 
declared unconstitutional, the validity of the remaining provisions hereof shall remain in 
full force and effect.
SEC. 6. 
Effectivity Clause.- This Act shall take effect immediately after its 
complete publication either in the Official Gazette or in a newspaper of general 
circulation in the Philippines.
Approved,
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