Panel OK’s mining fiscal regime bill

REUTERS

THE HOUSE Ways and Means Committee approved on Wednesday a new substitute bill establishing a fiscal regime for the mining sector, which will impose a margin-based royalty and windfall profits tax on miners.

Under the approved substitute bill, large-scale metallic mining operations within mineral reservations will be subject to a 3% royalty rate of the gross output of minerals or mineral products extracted.

Large-scale metallic mining operations outside mineral reservations will be slapped with a margin-based royalty on income from metallic mining operations.

For instance, miners with margins of 1% up to 10% will be subject to a 1% rate. The royalty rate can go up to as high as 5% for those with margins above 70%.

Under the bill, small-scale mining operations will be imposed a royalty rate equivalent to 1/10 of 1% of gross output of minerals or mineral products extracted or produced pursuant the People’s Small-scale Mining Act of 1991.

A windfall profits tax will also be slapped on metallic mining operations based on their respective margins. Miners with margins of more than 35% up to 40% will be imposed a rate of 1%, while those with margins of more than 80% will be imposed a 10% rate.

Ronald S. Recidoro, executive director of the Chamber of Mines of the Philippines, said its members representing large-scale contractors “feel that further increases (in tax) may not be necessary at this time.”

“Nonetheless, if a new fiscal regime for mining is absolutely needed to help the country’s post-pandemic economic recovery and to show the mining industry’s commitment as the gov’t partner in nation building, the Chamber of Mines manifests its support for the aforementioned House bill,” he told the House Committee on Ways and Means on Wednesday.

Mr. Recidoro said the substitute bill proposes a “rational and progressive fiscal regime that will allow [the] government a fair and increased tax take from mining while at the same time ensuring the competitiveness, attractiveness, and sustainability of the country’s mining industry.”

Mr. Recidoro said the proposed new tax structure would result in a higher tax take from the industry “under a profitable scenario.”

“We are preparing for the bicameral conference meetings when the Senate finishes its versions of these measures,” House Ways and Means Committee Chairman and Albay Rep. Jose Ma. Clemente S. Salceda said in a statement.

The Senate has yet to file a mining fiscal regime bill, despite this being a priority measure listed in President Ferdinand R. Marcos, Jr.’s State of the Nation Address.

The substitute bill approved by the House panel on Wednesday is different from the one approved by the committee in August 2022. The Chamber of Mines of the Philippines last year opposed the bill that sought to raise the effective tax rate on mining to 51% from 38% and impose a 5% royalty on the market value of gross output for large-scale mining operations.

Last month, Finance Secretary Benjamin E. Diokno said Congress needs to promptly pass tax reform legislation for the mining industry, saying foreign investors are likely to find a simplified tax regime more attractive.

He said the goal is to harmonize the tax treatment of mining that takes place in designated reservations with that of operations outside reservations. — Beatriz Marie D. Cruz



Panel OK’s mining fiscal regime bill
Source: Bantay Radio

Post a Comment

0 Comments