Section 79. For the privilege of exploring, developing, mining, extracting, and disposing of the minerals from the lands covered by his lease, the lessee shall pay to the Government of the Philippines, through the Collector of Internal Revenue, the rentals, royalties, and taxes provided by law. The rentals shall be due and payable in advance on the date of the granting of the lease, and on the same date every year thereafter during the life of the lease or any renewal thereof; the royalties shall be due and payable within sixty days after the shipment of the mineral or mineral products from the mines; and the tax at the time and in the manner all other real estate taxes are payable under the law. Before the mineral or mineral products are removed from the mines, the Collector of Internal Revenue or his representatives shall first be duly notified thereof. The rentals, royalties, and taxes, shall be as follows:
Rentals. — On all mineral lands of the first, second, fourth, and fifth groups provided for under this Act — one peso per hectare or fraction thereof. Fifty per centum of all the rentals collected shall accrue to the province, and fifty per centum, to the municipality in which the mining claim or claims is or are located: Provided, That in case of chartered cities the full amount shall accrue to the city concerned.
Royalties. — On all minerals extracted from, or mineral products of, mineral lands of the first, second, fourth and fifth groups as provided for in this Act — a royalty of one and one-half per centum of the actual market value of gross output thereof; Provided, That in the case of gold mines, their annual gross output shall be subject to a royalty of one and one-half per centum when the value of the said output does not exceed five hundred thousand pesos; two per centum when the value exceeds five hundred thousand pesos but does not exceed one million pesos; two and one-half per centum when the value exceeds one million pesos but does not exceed one million five hundred thousand pesos; three per centum when the value exceeds one million five hundred thousand pesos but does not exceed two million pesos; three and three-eighths per centum when the value exceeds two million pesos but does not exceed two million five hundred thousand pesos; three and three-fourths per centum when the value exceeds two million five hundred thousand pesos but does not exceed three million pesos; four and one-eighth per centum when the value exceeds three million pesos but does not exceed three million five hundred thousand pesos; four and one-half per centumwhen the value exceeds three million five hundred thousand pesos but does not exceed four million pesos; four and three-fourths per centum when the value exceeds four million pesos but does not exceed four million five hundred thousand pesos; five per centum when the value exceeds four million five hundred thousand pesos but does not exceed five million pesos; five and one-eighth per centum when the value exceeds five million pesos but does not exceed five million five hundred thousand pesos; five and one-fourth per centum when the value exceeds five million five hundred thousand pesos but does not exceed six million pesos; five and three-eighths per centum when the value exceeds six million pesos but does not exceed six million five hundred thousand pesos; and five and one-half per centum when the value exceeds six million five hundred thousand pesos: Provided, further, That the following rates of deduction from the royalties on the annual gross output of gold payable under the provisions of this section shall be allowed:
Fifteen per centum in the case of lode mines producing gold from ores which average less than ten pesos, but more than seven pesos per ton;
Twenty-five per centum in the case of lode mines producing gold from ores which averages less than seven pesos per ton. The average value per ton of ore shall be determined by the total number of tons milled during that year for any particular lode mine.
Thirty-five per centum in the case of gold placer mines.
The term "gross output" of mines or mineral lands shall be interpreted as the actual market value of mineral or mineral products, or of bullion from each mine or mineral lands operating as a separate entity without any deduction for mining, milling, refining, transporting, handling, marketing, or any other expenses. The output of any group of contiguous mining claims shall not be subdivided. All the royalties herein provided to be charged shall accrue to the general fund of the Philippine Treasury, and shall be in lieu of the ad valorem tax on the market value of the output of mines provided to be levied and collected, under section fifteen hundred thirty-four of the Revised Administrative Code, as amended by Act Numbered Four thousand fifty-eight. In case mining is carried on upon private lands, the royalty due on the value of the output of such mines under any and all leases granted for the purposes shall be reduced by five per centum of the amount due to the Government under the provisions of this Act, which reduction shall be paid by the lessee to the land owner. This privilege shall not be granted to any person acquiring an option on the surface right after any mining location has been made on the mineral found therein.
Taxes. — All buildings and other improvements built in the land leased, except machines, mechanical, electrical and chemical contrivances, instruments, tools, implements, appliances and apparatus, used in connection with the mining and milling operations on the land leased, shall be subject to an annual real estate tax which shall be paid at the rate and in the manner all other real estate taxes are paid under the law. Fifty per centum of the real estate tax collected as herein provided shall accrue to the province, and fifty per centum of the same shall accrue to the municipality in which the mineral land leased is located: Provided, That in the case of chartered cities the full amount shall accrue to the city concerned.
In contracts of lease granted under this Act, it shall be provided that the rentals, royalties, and taxes, shall be payable in accordance with the provisions of existing law.