THIRTEENTH CONGRESS OF THE REPUBLIC } 
OF THE PHILIPPINES 
} 
FIRST REGULAR SESSION 
} 
SENATE OF THE PHILIPPINES ~\~,~<.:k:iVf?, 
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s. NO. 1.7 8 8. 
Introduced by Senator Juan M. Flavier 
EXPLANATORY NOTE 
The bill seeks to amend Section 290 of the Local Government Code which states 
that the internal revenue collections from the national wealth through mining, forestry, 
and fishery activities in the form of taxes, royalties, fees, charges, interests, fines or 
shares of the central government in any co-production, joint venture or production 
sharing agreements over such activities are to be shared with the local governments 
having jurisdiction over areas devoted to the utilization and development of the national 
wealth. 
Under the law, local government units are entitled to 40% of the gross 
collections derived by the national government from the utilization of and development 
of the national wealth by private persons or entities. 
While private persons or entities pay their taxes to the national government 
pursuant to existing laws, the national government has not fully remitted to the local 
government units their share in the national wealth taxes. It is thus very unfortunate 
that LGUs have always been shortchanged of their share from the revenues, taxes, 
charges or fees paid by private persons or entities to the national government 
This is compounded by the fact that although section 286 of the same Code 
mandates the automatic release of the internal revenue allotments to LGUs, there is no 
similar provision as regards shares in the national wealth. 
What further complicates this problem is the sites of payment of taxes by the 
private persons or entities. Some private persons and entities hold their principal offices 
in urban centers while their bases of operations are somewhere else. 
Under the 
Corporation Code, private persons or entities may pay their taxes to the national 
government at the place where they hold their principal offices, thereby depriving the 
host local government units the first crack at their shares in the said revenues. 
A good example of this situation is the Province of Benguet which is the host of 
Lepanto Consolidated Mining Company, Benguet Corporation, Philex Mining Company, 
Benguet Exploration, Black Mountain, Itogon-Suyoc Mines, Western Minolco, Sto Nino 
Mines, among others. The province was the source of the natural wealth but it did not 
get its fair share in the form of taxes. 
There is therefore an urgent necessity to amend section 290 of the Local 
Government Code in order to mandate persons engaged in the utilization and 
development of national wealth to pay directly to the LGUs and the national government 
their shares in the national wealth taxes. 
I n  view of the foregoing, the immediate approval of this measure is hereby 
requested. 


THIRTEENTH CONGRESS OF THE REPUBLIC} 
OF THE PHILIPPINES 
1 
FIRST REGULAR SESSION 
1 
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GY : ~ _ "  #- 
SENATE OF THE PHILIPPINES 
Introduced by Senator Juan M. Flavier 
AN ACT AMENDING SECTION 290 OF REPUBLIC ACT NO. 7160, 
OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Section 290 of Republic Act No. 7160, entitled the "Local Government Code 
of 1991" is hereby amended to read as follows: 
"Sec. 290. Amount of Share of 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 form the 
preceding fiscal year from mining taxes, royalties, forestry and fishery charges, 
and such other taxes, fees, or charges, including related surcharges, interest, or 
fines, and from its share in any co-production, joint venture or production sharing 
agreement in the utilization and development of the national wealth within their 
territorial jurisdiction I.]: 
PROVID€D, THAT PERSONS, NATURAL OR 
JURIDICAL, ENGAGED I N  THE UTILIZATION AND DEVELOPMENT OF THE 
NATIONAL WEALTH, SHALL PAY DIRECTLY THE ABOVEMENTIONED 
FORTY PERCENT (40%) OF THEIR NATIONAL WEALTH TAXES TO THE 
HOST LOCAL GOVERNMENT UNITS AND THE REMAINING SIXTY 
PERCENT (60%) TO THE NATIONAL GOVERNMENT. 
SEC. 2. All laws, executive orders, decrees, rules and regulations or parts thereof which 
are inconsistent with any of the provisions of this Act are hereby repealed or 
modified accordingly, 
SEC. 3. This Act shall take effect upon approval. 
Approved,