The Department of Finance (DOF) is expecting more mining applications in this administration amid the new tax rates being pushed under the new mining fiscal regime.
In a Philippine Star report, Finance undersecretary and Philippine Extractive Industries Transparency Initiative (EITI) focal person Cielo Magno stated that the government believes that the latest policies and developments in the global market will ramp up the industry.
Magno said that with the lifting of the moratorium on new mining projects, new mining applications will be coming in. She added that the Philippines “has a very good regulatory regime; complement that with EITI. I think we should be fine if we implement them properly.
Magno is sure that there would be new mining applications as it is expected that mineral prices will rise in the next few years, adding that nickel and copper, among others, will be vital for technology during a green transition.
The DTI official added that the price increase of minerals makes the sector attractive. However, the government has to ensure that environmental damage must be minimized and climate risks must be accounted for.
The new mining fiscal regime is expected to generate Php 38 billion in additional revenues. Magno assured that the proceeds of the new taxes would be marked for sustainable activities.
She added that the country’s mining industry has one of the lowest effective tax rates (ETR) in the world: 38.2% for gold, and 45.3% for copper – both of which are significantly below the global average of 58.7%.
Under the proposed mining regime, 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.