CA nixes Nueva Vizcaya tax assessment on OceanaGold

For lack of basis, the Court of Appeals (CA) Fifth Division has declared as null and void the cease and desist order (CDO) issued by the provincial government of Nueva Vizcaya to OceanaGold Philippines, Inc. which is undertaking a gold-copper project in Kasibu town in Barangay Didipio.

In a 15-page decision penned by Associate Justice Remedios Salazar-Fernando and concurred by Associate Justices Rosalinda Asuncion-Vicente and Ramon M. Bato, Jr., the appellate court said the CDO and the letter-assessment both issued to OceanaGold by the Office of Gov. Luisa Cuaresma on April 9 and May 9, 2008, respectively, “were without basis.”

“The activities of OceanaGold do not fall squarely within the coverage of the law or taxing ordinance that the Nueva Vizcaya provincial government sought to enforce on the firm. Their persistence in enforcing the assailed CDO and assessments, despite the patient inapplicability of the taxing ordinance to petitioner OceanaGold amounts to nothing less than a whimsical or arbitrary exercise of judgment,” the CA ruled.

The CA also said the activities of OceanaGold “could not be categorized as ‘quarrying,’ thus the provincial government cannot collect tax amounting to P28 million out of the company’s alleged quarrying activities.”

OceanaGold, being a financial or technical assistance agreement (FTAA) holder of the Philippine government, is exempt from securing any quarrying permits for earth-moving work.

Section 48 of Republic Act 7942 of the Mining Act of 1995 states “that an FTAA contractor shall have the right to extract and remove sand and gravel and other loose unconsolidated materials without need of a permit within the area covered by the mining agreement for the exclusive use in the mining operations.

Residents in Barangay Didipio and neighboring communities, have welcomed the decision of the Court of Appeals in favor of OceanaGold.

Earlier, some 250 residents of Barangay Didipio civic organizations in the community, including the members of the Didipio barangay council, signed a resolution reiterating their unwavering support to OceanaGold mining project which, they said, “will benefit not only our barangay and our province but our county as well.”