Philex looking for ‘amicable’ means to settle tax issue

MANILA, Philippines - Listed Philex Mining Corp. is looking for “amicable means” of settling its tax dispute with the municipalities of Itogon and Tuba in Benguet province straddled by its Padcal copper-gold mine.

Philex belied reports the local government of Itogon has issued a closure order against the company.

The two municipalities, however,  are going after the company for a total of P1.3 billion in supposed back taxes since 2003.

“Philex has been continuously discussing and negotiating with the LGUs’ ways and means to amicably settle this tax issue,” the company said yesterday.

Philex said the P1.3 billion in supposed back taxes remains unpaid to the municipalities, because of jurisdictional and boundary issues.

The Mineral Production Sharing Agreement (MPSA) of the Padcal mines straddles the two municipalities, although the main mining operation is located in Tuba.

In 2003, the municipalities enacted ordinances imposing tax on one percent of gross receipts of the company for the peceeding year. The company questioned in court the ordinance, protesting that a municipality cannot levy the same tax imposed by the National Government. 

In 2005, the court ruled that municipalities, may not imposes taxes already levied by the National Government and that no municipality can “impose on its own, a tax which would effectively remove from the other local government unit the power to tax the same activity.” 

“We have already given to them our official response by reiterating that Philex is more than willing to meet its responsibility, provided that the tax imposition is valid, the assessment is legal and the boundary dispute is resolved,” said the company.