THIRTEENTH CONGRESS OF THE REPUBLIC} 
OF THE PHILIPPINES 
1 
FIRST REGULAR SESSION 
} 
- 
Introduced by Senators Juan M. Flavier and Alfredo S. Lim 
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 site 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. 
In view of the foregoing, the immediate approval of this measure is hereby 
requested. 


THIRTEENTH CONGRESS OF THE REPUBLIC} 
OF THE PHILIPPINES 
> 
FIRST REGULAR SESSION 
} 
& 
SENATE OF THE ~
~
I
~
~
P
I
~
~
S
 
Introduced by Senators Juan M. Flavier and Alfred0 Lim 
AN ACT AMENDING SECTION 290 OF REPUBLIC ACT NO. 7160, 
OTHERWISE KfbC)WN AS THE LOCAL G ~ V E ~ N ~ E N T  
CODE OF 
1931 
Be it enacted by the Senate and the House of Representatives of the Phifippines 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 oFShare of Local Government Unit3 - 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 E.]: 
PRUVTDED, THAT PERSONS, 
NATURAL OR JURIDICAL, ENGAGED I N  THE UTILIZATION AND 
DEVELOPMENT OF THE NATIONAL WEALTH, SHALL PAY DIRECTLY 
THE ABOVEMENTIONED FORTY PERCENT (40g/o) OF THEIR N A ~ O N A L  
WEALTH TAXES TO THE HOST LOCAL GOVERNMENT UNIT§ AND THE 
REMAINING 
SIXTY PERCENT 
(609'0) 
TO THE 
~
A
~
~
GOVERNMENT. 
SEC. 2. All laws, executive orders, decrees, rules and regulations or parts thereof 
which are inconsistent with any of the provisions of this A d  are hereby 
repealed or modified accordingly. 
SEC. 3. This Act shall take effect upon approval. 
Approved.