Cebu Governor Approves Drastic Tax Reduction for Quarry Company
The Cebu Provincial Government, under Governor Pamela Baricuatro, has agreed to a significant compromise settlement with Apo Land and Quarry Corp. (ALQC), slashing a massive P1.218-billion tax assessment down to just P211.56 million. This proposed agreement, which still requires formal approval from the Provincial Board (PB), stems from ALQC's initiative to resolve its longstanding tax liabilities with the provincial executive department.
Legal Basis for the Billion-Peso Reduction
Governor Baricuatro explained that the dramatic decrease in the tax bill primarily resulted from the removal of extraction fees, which were originally imposed on ALQC's quarrying activities. The key factor here is the location of the operations: ALQC was extracting materials from private land, not public property. "Even I was asking why the amount became so small, why it was significantly reduced," Baricuatro stated. "But the lawyers explained to me that this is really the only allowable fee because they did not extract on public land. It was private land, so we cannot collect if the extraction was done on private property. That’s why there is no extraction fee."
Resti Arnaiz, the legal officer for the Office of the Governor, reinforced this decision by citing a Supreme Court ruling, Province of Bulacan v. Court of Appeals. This ruling explicitly states that local governments are only authorized to charge extraction taxes for materials taken from public lands, not from privately owned properties. "Regardless of whether you have an MPSA (Mineral Production Sharing Agreement) or whether the Province issued your permit, if the extraction is within a private lot, you cannot charge an extraction fee," Arnaiz emphasized.
Recalculation of the Tax Assessment
With the extraction fees eliminated, the Provincial Accounting Office undertook a thorough recalculation of ALQC's tax obligations. The revised assessment includes the following components:
- Monitoring fees: These were adjusted based on a new fair market value of P300 per cubic meter of limestone.
- Environmental enhancement fees: These charges remained unchanged in the final calculation.
- Surcharges and penalties: All accumulated late fees, dating back to 2009, were retained in the settlement amount.
After these adjustments, the total proposed settlement was finalized at P211,560,530.35. Arnaiz noted that this figure was not arrived at hastily; it followed a series of detailed negotiations between ALQC's legal team and the Provincial Legal Office.
Next Steps and Historical Context
If the Provincial Board approves the compromise agreement, ALQC will be required to pay the entire P211.56 million in a single lump sum within seven days of signing the deal. Upon payment, the company will receive a tax clearance certificate, effectively absolving it of any further tax liabilities with the Cebu Provincial Government. The PB was initially scheduled to discuss this resolution on Monday, March 2, but the decision has been deferred for further review.
This tax dispute has deep roots, originating under the administration of former governor Gwendolyn Garcia. Garcia had previously challenged ALQC's operations, even requesting the Department of Environment and Natural Resources to cancel the company's contracts due to alleged violations of environmental and mining laws. Earlier provincial calculations estimated that ALQC owed over P1 billion just for limestone extracted between April 2016 and December 2024, with the company having paid only a minimal portion of that amount.
Now, the fate of this multi-million peso controversy rests in the hands of the Provincial Board members. Their upcoming vote will determine whether this protracted financial dispute is finally brought to a close, marking a significant chapter in Cebu's governance and tax enforcement efforts.
