Mining fiscal regime bill to ensure ‘equitable imposition’ of royalty fees – Solon

House Committee on Ways and Means Chairperson Rep. Estrellita Suansing defended on Wednesday a bill seeking to establish the fiscal regime for the mining industry, arguing the proposed measure would ensure an equitable imposition of royalty on mining operations.

“Under this measure there is no more distinction on whether mining exploration is conducted outside or inside a mineral reservation and whether it is large scale or small scale. Equity that fiscal burden should be shared equally by all who explore the natural resources of the country,” Suansing explained during her sponsorship speech.

Through viva voce voting, the House of Representatives approved on second reading the House Bill (HB) 8400 that substituted HB HB 7994 of Suansing and HB 422 of Rep. Romero Quimbo (2nd District, Marikina City).

House Speaker and Pampanga Representative Gloria Macapagal-Arroyo is among the co-authors of the proposed measure.

Under the bill, large-scale mining contractors within mineral reservations will pay a royalty of three percent of their gross output from the current five percent, while those operating outside such areas will pay the government with royalty based on their margin of income from their mining operations.

On the other hand, small-scale miners within or outside mineral reservations will have to pay a royalty equivalent to 1/10 percent of their gross output.

The proposal also seeks a margin-based tax on windfall profits gained from mining operations.

Suansing further noted the bill would help ensure the government gets its rightful profit share from mining operations.

After the committee level approval of the substitute measure on Monday, some groups have expressed grave concern over some of its provisions, explaining it would only reduce the government’s revenue from minerals.

The Department of Finance (DOF) reportedly said it will continue to push for its own version of mining industry fiscal regime. It can be noted the DOF pushes for a uniform five percent royalty tax on mining operations.

Mines operating within mineral reserves pay a five percent royalty on gross output, while those operating outside such areas pay no royalty fees to the government.

In a report by Business World, Finance Assistant Secretary Ma. Teresa S. Habitan said they will push in the senate for the DOF version of the proposed measure, noting the HB 8400 would give the government smaller mining revenues.