Activists hit order to halt P400M tax collection from South Cotabato mining firm

GENERAL SANTOS, Philippines – Environmentalists and anti-mining groups have expressed their dismay about a decision by the Court of Tax Appeals (CTA) to stop the local government of Tampakan in South Cotabato from collecting taxes from mining company Sagittarius Mines Incorporated (SMI). 

The proposed gold-copper mining operations in Tampakan have been a topic of controversy among various groups.

Rene Pamplona, the chairperson of the Alyansa Tigil Mina (ATM), downplayed the jubilant reactions of pro-SMI groups to the CTA’s temporary restraining order (TRO), calling it a short-term decision that was only valid for 20 days. 

Pamplona said he was still hoping that the CTA will uphold the decision of a regional court in upholding the right of the town government to compel SMI to pay its tax arrears.

A CTA’s TRO, dated February 10, suspends a Regional Trial Court (RTC) order which upheld a move by the Tampakan town government to collect nearly P400 million in taxes and arrears from SMI. 

SMI and pro-mining groups in the province have hailed the CTA decision as a major legal victory, but it has remained unclear if the TRO was already served as of posting time.

Pamplona criticized the CTA’s decision, saying that it was inconsistent with local autonomy and the Local Government Code because it would limit the Tampakan town government’s ability to collect SMI’s tax arrears.

The Code empowers local governments to decide on mining projects that fall within their jurisdictions. 

Tampakan Mayor Leonard Escobillo revoked SMI’s town permit in September 2022 because the company’s business description was allegedly falsely stated. 

The assessed taxes, amounting to P397 million, prompted SMI to file a case against the local government before the RTC. 

The lower court, however, ruled in favor of the town government, prompting SMI to elevate the case to the CTA, which subsequently issued a restraining order.

The CTA also directed the Tampakan town government to desist from implementing a warrant of distraint and levy or a warrant of garnishment on SMI’s properties and from collecting the assessed deficiency taxes. 

The tax court ruled that the tax assessment violated SMI’s procedural and substantive right to due process. 

The amount being collected is enough to cripple and cause damage to the SMI gold-copper project, its host communities, and the government, the CTA said.

Blaan tribal leaders in the town, who have been advocating for a provincial ordinance that would lift the ban on open-pit mining, hailed the CTA ruling as a victory in their effort to get SMI to start its mining operations in Tampakan.

Jaybee Garganera, ATM’s national coordinator, said some tribal leaders were “misinformed about the principles of local autonomy when it comes to a local government giving its approval to national projects.” 

Garganera said the state is required to seek the green light of local governments for environmentally-critical projects. 
He also said the Local Government Code mandates the national government to conduct consultations with different stakeholders.

SMI responds

In a March 17 statement, SMI president Roy Deveraturda said that although the pending case before the CTA involving the company and the Tampakan town government pertains to business taxes, it was false to claim that the CTA issued a 20-day TRO. 

Deveraturda clarified that the CTA granted a preliminary injunction, suspending tax collection until the case’s final disposition.

He alleged that the municipal government ordered the SMI facility closed down on September 15, 2022, while the court’s status quo ante order was in effect. 

He also said Tampakan officials wrongly accused SMI of fraud and misrepresentation during the business permit application process, asserting that the CTA reviewed the submitted evidence and determined that the company had been truthful.

Deveraturda voiced his frustration with what he called the mining industry’s “public trial” and noted that advancements in mining science and technology have made current mining practices different from their predecessors. 

He also lamented that while many criticize large mining operations and responsible miners, few address illegal small-scale mining’s environmental degradation and fatal consequences.

Deveraturda said environmental stewardship was paramount to SMI. “Taking care of the environment is of primary importance in all responsible mining companies’ operations, including that of SMI. Demonizing the industry belittles the invaluable contribution of the mining industry to the society and the local and global economies,” he said. – Rappler.com