Surigao City wants to collect P200M in unpaid taxes from PMO

SURIGAO CITY (MindaNews/10 July) — Saying it would help boost the city’s capability to finance development projects, Surigao City Mayor Ernesto T. Matugas is pushing for the collection of P200,739,598.72 million in unpaid real property taxes from the Privatization and Management Office (PMO).

The PMO, formerly the Assets Privatization Trust (APT) held non-performing assets from Development Bank of the Philippines, which included the machineries of then Marinduque Mining Industrial Corporation and now Philnico Mining and Industrial Corporation.

The abandoned nickel refinery plant is located in Nonoc Island in Surigao City.

The plant started its commercial operations in 1974 using the Ammoniacal Ammonium Carbonate (Caron) Process and had produced nickel and cobalt products.

After incurring heavy financial losses it was foreclosed by its creditor banks — Development Bank of the Philippines and Philippine National Bank – in 1984. Despite the foreclosure order it continued operating and only shut down in March 1986.

Early last year, the Surigao City government tried to sell the redundant assets allegedly owned by the national government. But the PMO blocked the move by filing a petition for a writ of preliminary injunction before Surigao Regional Trial Court Branch 29 on September 15, 2011.

“Still, the city government of Surigao pushed for the auction, slated for Sept. 19 to Oct. 26 in 2011,” PMO said.

Karen G. Singson, chief privatization officer of PMO earlier said the equipment are owned by the national government and may not be subject to real property tax.

PMO contended that these machines are part of a payment restructuring deal entered into by Philnico that covers government’s share in Nonoc Mining and Industrial Corp. and thus cannot be put on the auction block.

It may be recalled that PMO, Philnico Mining Industrial Corporation (PMIC) and Nonoc Mining Industrial Corporation entered into an agreement in 1999 changing the technology from Caron process to pressure acid leach process, rendering some facilities of the nickel refinery plant redundant. These redundant assets were declared for real property tax purposes in 10 separate tax declarations conspicuously stamped as exempted.

Petitioner posited that the redundant assets held by PMO as their trustee are exempted from real property taxes pursuant to Sections 133 and 234 of the Local Government Code.

But the local government is seeking collection of real property taxes.

“The machineries are subject to real property tax,  in back taxes from 2000 to 2010,” said city legal officer and concurrent city administrator, Atty. Manuel Coro.

Coro told MindaNews the city government is now selling the equipment to recoup the losses from unpaid taxes.

He added that the P200 million would enable the city to cope with the P54-million budget cut due to the creation of 16 new cities.

He said they have legal basis to collect the taxes saying issue has been resolved in the court.

On June 15, 2012, RTC Branch 29 Judge Victor A. Canoy handed down a resolution denying the petition filed by PMO for lack of legal and factual basis.

“The city may proceed with the public auction of the redundant assets subject to the observance of the proper procedures under Section 258 of the Local Government Code,” the nine-page resolution read.

The city government has set the public auction for the equipment on July 16 at 3:00pm at the Surigao City Cultural Center.

Sarah P. Yamit, City Treasurer said the winning bidders may pay in cash or certified check

MindaNews tried to call the legal department of PMO headed by Christine Antonio, but to no avail.

Late last month, some city officials including a chemist from Pacific Cement Company based here, City Engineering Office, City Health Office and local reporters went to the mine site to verify reports ammonia had leaked from company tanks causing illnesses on local residents.

The inspection did not find any leaks. (Roel N. Catoto/MindaNews)