Dinagat province to sue 3 mining firms for refusal to pay local taxes

SURIGAO CITY (MindaNews / 23 Apr) – For refusal to pay local tax obligations, the province of Dinagat Islands will sue three large-scale mining companies.

The offending mining firms are identified as Cagdianao Mining Corporation (CMC), Krominco Inc. and Century Peak Corporation, which have all been extracting nickel ore and shipping them abroad.

Cagdianao Mining operates in the municipality of Cagdianao, Krominco has been mining in Libjo town while Century Peak has been operating in Libjo and Loreto.

A resolution recently passed by the Sangguniang Panlalawigan has authorized Gov. Glenda Ecleo to file cases against the three companies for their failure to settle their “Soil Depletion Tax Liability.”

The suit will also seek for damages and attorney’s fees, said board member Mario Menil.

Enacted by the Provincial Board in 2009, the Soil Depletion Tax imposes a one-percent tariff on gross receipts of all mineral ore “extracted and/or shipped” from the province.

Of the three, CMC (a subsidiary of Nickel Asia Corporation) has the highest liability amounting to more than P174.8 million. This includes “interests and penalties since 2009 until 2014 shipments of minerals,” Menil told MindaNews via text Thursday morning.

Century Peak has a liability of P22.5 million while Krominco has an outstanding balance of P6.9 million.

Eight large-scale mining companies currently operate in Dinagat, which is a declared mineral reservation. That means on top of the two-percent excise tax, mining companies in the province also pay five-percent royalty based on the market value of the gross output of the minerals they extract.

Dulmar M. Raagas, president of the Chamber of Mines-Caraga Region, Inc., said most of their members consider the Dinagat tax to be a form of double taxation. He noted that other mining provinces, such as Surigao del Norte, do not impose a similar tax.

Raagas said it is up to any of their member-companies to comply or challenge in court Dinagat’s controversial tax.