BAGUIO CITY — Once enacted, host local government units (LGUs) will directly receive their share of National Wealth Taxes paid by large corporations.

Baguio Congressman Mauricio G. Domogan filed House Bill (HB) No. 6262, proposing an amendment to Section 290 of Republic Act No. 7160, also known as the Local Government Code (LGC) of 1991. The proposal aims to ensure that LGUs’ rightful share of the National Wealth Tax is remitted to them immediately and directly.

Under the current Section 290 of RA 7160, all internal revenue collections from the utilization of national wealth—through mining, forestry, and fishery activities, including taxes, royalties, fees, charges, fines, or the central government’s share in joint ventures or co-production agreements—are required to be shared with host LGUs. The law specifies that LGUs are entitled to 40 percent of the gross collections.

However, Domogan noted in the bill’s explanatory note that concerned LGUs have long complained that, despite the compliance of large operating companies, the national government has allegedly failed to promptly and fully remit the LGUs’ share of the National Wealth Taxes.

He stated that this situation leads to financial losses for local governments.

While Section 286 of the LGC mandates the “automatic release” of the National Wealth Tax allotment, no similar explicit provision exists for the share from the national wealth collections itself, causing delays and uncertainty. An added complexity arises from the tax payment mechanism of private entities: some corporations or businesses establish their principal offices in urban areas, outside the host LGUs where the actual operations—such as mining and logging—take place.

The Corporation Code allows these entities to pay national taxes in the area of their principal office. This practice further complicates the remittance process for host LGUs, preventing them from immediately receiving their statutory share.

Domogan cited the case of Benguet province, stressing that despite being home to large-scale mining operations—some of which are top producers of gold and copper—the host communities reportedly remain poor. “The natural resources are extracted, but the local governments have allegedly not received their due share,” the lawmaker stated.

He said these reasons necessitate the amendment of the relevant section of the LGC.

The author of the bill appealed to his colleagues in Congress to approve the measure to provide crucial financial support to local governments. He also suggested that a counterpart measure be introduced in the Senate.

HB 6262 has been officially referred to the appropriate committee in the House of Representatives for review.