The Department of Finance expects to generate an additional PHP 6.3 billion in average annual revenues from existing mining operations following the issuance of the Implementing Rules and Regulations (IRR) of Republic Act No. 12253, which establishes a new fiscal framework for large-scale metallic mining.
Finance Secretary Frederick D. Go said the IRR operationalizes the law, which took effect on September 4, 2025, and is intended to create a clearer and more accountable system for collecting government revenues from mining activities. “This is a critical step forward in unlocking the full economic potential of the mining sector while maintaining safeguards for transparency, accountability, and protection of the environment,” Go said.
Under the IRR, large-scale metallic mining projects located within mineral reservations will pay a 5% royalty, while projects outside mineral reservations will be subject to a margin-based royalty of 1% to 5%, depending on profitability. A windfall profits tax ranging from 1% to 10% will also apply to projects with profit margins between 30% and 75%.
The IRR also standardizes how royalties and windfall taxes are computed by clearly defining the tax base, allowable deductions, and the treatment of gross output. This replaces previously complex and varying tax arrangements across different mining agreements.
Mining firms are required to file and pay royalties within 60 days after the end of each calendar quarter, with the Bureau of Internal Revenue designated as the primary collecting agency. Filings may be submitted either electronically or manually.
Each mining project will be treated as a separate taxable entity under a ring-fencing rule, meaning taxes, audits, and compliance will be assessed on a per-project basis. The IRR also strengthens audit and monitoring requirements, mandates public disclosure, and formalizes coordination among the Department of Environment and Natural Resources, Bureau of Customs, Bureau of Local Government Finance, local governments, and industry stakeholders.
For the government, the new rules are expected to immediately increase revenues from existing mining operations while reducing disputes and compliance issues caused by unclear tax structures. By tying collections more closely to project profitability and strengthening oversight, the DOF aims to ensure the state secures a fairer share from mineral resources without discouraging investment.
As the new mining fiscal regime takes effect, how will clearer tax rules and tighter oversight shape future investment decisions and revenue collection in the sector?
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