After much deliberation on the four percent excise tax included in the newly effective Tax Reform for Acceleration and Inclusion (TRAIN) Law, the Department of Finance (DOF) is in talks with the Mining Industry Coordinating Council (MICC) to increase the imposed tax on mineral resources on a per-commodity basis.
“It makes sense. You don’t use the same tax rate for nickel and for copper. The extractive costs and values [of minerals] are different,” Finance Secretary Carlos G. Dominguez III told the BusinessMirror, adding that they are also preparing the proposed amendments to be applied to Executive Order (EO) 79.
EO 79, signed by former President Benigno S. Aquino III in 2012, is the last reform implemented in the mining sector, which provides policies and guidelines to ensure environmental protection and responsible mining.
Along with the new tax increase, the government is also drafting finalities of a roadmap to the future of the country’s mining industry, including another feature – a revenue-sharing scheme between the government and mining contractors – all of which will be incorporated as amendments to the Philippine Mining Act of 1995.
“Looking not only on the tax component, they are looking at the royalties also. [In terms of a sharing scheme] I think that is what they are looking at. Nothing is final,” DOF Undersecretary Bayani H. Agabin said.
Dominguez also proposed succeeding reviews starting in 2019 of the 26 mines ordered suspended and closed by ex-DENR Chief Regina Paz L. Lopez under DENR Administrative Order 2017-10, which he said should be practiced once every two years not only to those banned but all mining operations in the country.
These proposals will be thoroughly discussed with the MICC on the first week of March, according to DOF Undersecretary Karl Kendrick T. Chua.
Earlier, the Mining and Geosciences Bureau (MGB), DENR’s mining regulating unit, expressed its support to the output-based taxation, to the Chamber of Mines of the Philippines (COMP) said the proposed scheme should be benchmarked globally that the Philippines will not lose mining investments with a more competitive tax regime.
COMP Executive Director Ronald Recidoro earlier said his agency’s proposal submitted to the previous administration was originally a “more accurate and more correct” commodity-based approach to mining tax scheme.
Source: BusinessMirror
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