The Philippine government approved the law that exempts small-scale gold miners from excise and income taxes when trading with the Bangko Sentral ng Pilipinas (BSP) to not only provide a more stable and profitable market for both traders and miners but to also boost the country’s domestic gold reserves and global economic standing.
“The law seeks ultimately to recoup the 99 percent drop in BSP’s domestic gold purchases owing to the imposition of taxes on said purchases beginning July 2011,” BSP Deputy Director of Loans and Credit Elaine Calleja said in a Mining Technology article.
According to a Bloomberg report, this approved law could not only boost sales to almost one million Fine Troy Ounces (FTO) annually but also build domestic gold purchases and stabilize the country’s gross international reserves (GIR).
“This [the GIR] will improve the country’s credit worthiness and serves as a buffer against external economic and financial shots. Gold, being a valuable component of the GIR, allows asset diversification, accords economic security and yields additional income. It preserves the value of international reserves and hedges against inflation and volatilities in other foreign current assets,” Calleja said in the report.
“The law would allow marginalized small-scale miners and gold traders access to BSP’s purchase of gold at international market prices with fair weighing and valuation as opposed to the black market,” Calleja was quoted saying.
This tax exemption law will help these small-scale miners to not only establish a stable trading system with the central bank but to also establish a responsible gold mining industry.
