The Department of Environment and Natural Resources (DENR) is planning to propose an increase in the portion where local government units will get from mining companies in order to ensure fairness in the extractive industry.
DENR Secretary Roy Cimatu said that his department will make sure that the development of the country’s natural resources will benefit the people, especially in the areas affected by mining.
“We will propose and support regulations that will increase the share of local government units in mining taxes, including making certain its timely release, to enable the local government to implement projects that will improve the living conditions in mining communities,” Cimatu said.
He also said that they will declare high-mineral potential areas as mineral reservations, and monitor strictly the payment of royalties by mining companies operating.
The taxes that will be collected from the mining companies will be different for every LGU depending on the agreement of both parties.
Mining companies operating under a mineral production sharing agreement (MPSA) pay the regular corporate tax, two percent excise tax, business tax, royalty payment for indigenous peoples directly affected by mining operation, under the present system.They also pay royalty for mineral products extracted from mineral reservations.
Firms that operate in mineral reservation areas will also pay an additional five-percent royalty. Those that operate under a financial and technical assistant agreement (FTAA) must share 50 percent of their revenues with the government.
In order to improve transparency and accountability in the mining sector, DENR promised that all mining companies, including small-scale miners, will take part in the Philippine Extractive Industries Transparency Initiative (PH-EITI).
Cimatu is looking forward to greater participation by all stakeholders in the PH-EITI to gauge more accurately the benefits against the costs of natural resources development.
PH-EITI is a multi-stakeholder group that pushes for the local implementation of a global standard of transparency for improving governance of natural resources.
It also serves as a platform to systematically report, review, and asses the revenues received by the government from extractive industries.
DENR is ordering mining firms to submit the needed requirements to the multi-sectoral group of PH-EITI.
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