The Bangko Sentral ng Pilipinas (BSP) projects a boost in gold purchases in the following months after the Bureau of Internal Revenue (BIR) issued a fiscal regime exempting traders and small-scale miners from income, withholding, and excise taxes.
According to a BusinessWorld report, BIR Commissioner Caesar Dulay issued Revenue Regulation (RR) No. 4-2020 on Tuesday, February 18, the implementing rules and regulations (IRR) for Republic Act (RA) No. 11256, which exempts the gold that traders and registered small-scale miners sell to the central bank from income, withholding, and excise taxes.
“The BSP expects an increase in gold purchases when the law takes effect next month. However, we also expect the influx of sales to be gradual taking into consideration the documentary requirements that the law prescribes. Likewise, we anticipate greater benefit to our small-scale miners due to its use of BSP’s prevailing international market price of gold,” BSP Mint and Refinery Operations Department expressed in the report.
Moreover, the department also expressed that the VAT exemption’s effect to its existing gold stock remains unclear as “there are several factors to consider, such as compliance to requirements especially now that the BSP is strengthening its commitment to responsible sourcing.”
“Nevertheless, the BSP is upbeat in the prospect of returning gold sales to the BSP and that, in turn, will help increase our gold stock,” the department stated.
The regulations will be effective first week next month or 15 days after its publication in a newspaper starting Thursday, February 20.
Meanwhile, the BIR warned that the seller will be “primarily and solely liable for any deficiency taxes” if they find that the tax-free gold, which should be sold to the central bank, was not transacted with the BSP.
