Cagayan black sand miners win COA tax case

/ 02:40 AM August 14, 2019

MANILA, Philippines — The Commission on Audit has lifted the notice of charge (NC) it earlier imposed on 13 mining companies engaged in black sand mining in Cagayan during the Aquino administration.

In a decision dated June 11 but made public only on Tuesday, the COA lifted the P94.8-million NC it had imposed on the mining companies due to alleged tax deficiencies.


“The issuance of the NC was premature considering that the auditors failed to consider the assessment period and assessment procedure of the BIR (Bureau of Internal Revenue),” the COA said.

It explained that it was the BIR and not COA auditors that was in charge of collecting taxes


The case stemmed from the discovery by local auditors of the BIR regional offices in Cagayan that from 2011 to 2013, the black sand miners, which included Chinese companies, did not pay taxes in the amount of P94.8 million.

The companies and individuals issued an NC included Efren Gannaban, Alpha Infinite Vision, Cagayan Great Mines, Feiron Steel Inc., Global Exploration Mining Development, Golden Sea Miners, Huaxia Mining, Julio Dicierto, Lian Sing Philippines Stone, Lutra, San You Phil, Unic 101 and Well Resource Mining Inc

In February 2014, the officer in charge-audit team leader and the supervising auditor of the BIR issued Audit Observation Memorandum (AOM) No. 2014-03-(2013) regarding the deficiency in the collection of excise taxes from the mining companies for the years 2011 to 2013, in the amount of P97.9 million.

The excise tax due was later recomputed to include Huaxia Mining’s sand and gravel fee, which brought the total amount to P111.69 million.

The COA regional office, however, said that only P16.9 million were collected by the BIR.

“Thus, there is a deficiency of P94,801,948.73. Despite this deficiency, the BIR issued excise tax clearance certificates (ETCC) to the mining companies,” the decision said.

The P94.8-million deficiency triggered the imposition of a notice of charge against the 13 companies and individuals, including several BIR officers.


In their appeal, the BIR officers argued that the COA had no jurisdiction over the case since the BIR had not issued a final ruling on the assessments.

For its part, the COA appreciated the merits of the argument of the BIR officers, and lifted the notice of charge.

“The amount of excise taxes payable by the mining companies had yet to be verified/computed against actual payments and corresponding assessment made by the BIR officers concerned, in accordance with the BIR rules and regulations,” the decision said.

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TAGS: Cagayan back sand miners, COA tax cases, notice of charge
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