The House of Representatives Ways and Means Committee has approved the new fiscal regime for the mining sector, which is seen to generate Php37.5 billion for the country.
The committee has approved the bill proposing a rationalized and single fiscal regime applicable to all existing and prospective large-scale metallic mines, regardless of their location.
Albay Rep. Joey Salceda, who chairs the Ways and Means Committee, said that the new fiscal regime would bring the Philippines “closer to the middle of the pack” among other mining countries.
The committee has adopted the version of the Department of Finance that would “bring the country’s effective tax rate on mining (considering all taxes) to 51 percent, up from 38 percent under the current system.”
“51 percent is a good number, because it brings us closer to Australia’s effective tax rate, at around 51 percent as well, counting royalties. Among major countries, only Chile and South Africa have lower effective tax rates than us. This proposal brings us closer to Australia and Indonesia, which are our regional comparatives. China is at a very high 71 percent effective tax rate for gold mines,” Salceda said.
Under the proposal, DOF is eyeing to impose a five percent royalty rate for all large-scale mining operations and provide incremental revenues of at least Php5 billion annually. In the current setup, only those mining projects located in mineral reservation areas are subject to a royalty payment.
DOF is also pushing for a rationalized and single fiscal regime that is applicable to all large-scale metallic mines, regardless of location.
To encourage downstream and proper valuation of minerals, DOF is proposing a 10 percent export tax on the gross value of mineral ore.
