The Senate adopted the House’s version of new fiscal regime for the mining sector in the Philippines, House Speaker Gloria Macapagal-Arroyo said Tuesday in an event for the nickel industry.
Arroyo expressed optimism on the approval of her co-authored House Bill No. 8400 into a law during her speech in the Nickel Initiative 2019 which she attended as the guest speaker.
Both chambers of the house are working to pass the new fiscal regime for the mining industry expecting its passage by June before the joint session ends.
“We want the sector to grow and contribute to national development, but we want to do so within a framework that will be in accordance with the directive of President Duterte,” Arroyo was quoted in an article by Inquirer.net.
The said bill requires large-scale mines a margin-based royalty tax starting from one-percent to 10-percent which will progress to five percent as the margin increases to 70 percent.
Large-scale mining will also be liable in paying a royalty tax equivalent to three percent of the gross output of the minerals mined inside mineral reservations.
Meanwhile, small-scale mining contractors operating both inside and outside of mineral reservations will be charged a royalty equivalent to one-tenth of one percent of gross output.
With these terms, the government will collect taxes around P 22 billion compared to 2017’s P18.71 billion and mining royalty of P 2.57 billion instead of the current’s P1.13 billion.
The new fiscal regime, according to the Department of Environment and Natural Resources (DENR), will give way to a better standing for the mining industry next year as the government and the private sector benefit from it.
Industry stakeholders have been seeking for the end of the moratorium on new mining permit issuance upon the implementation of the TRAIN Law. However, the Department of Finance (DOF) advices the government to have a higher tax rate on mining first, proposing a 10 percent tax rate.
Leaders in the mining industry hope, through the second round of tax increase on the mining industry, that the executive order suspending mining operations implemented by the previous administration will finally be lifted.
