Miners are throwing a fit in the dirt. The reason is that there is a proposed bill allowing the government to bring home a 10-percent doggie-bag share in the mining industry’s gross sale. This means that if it would be based on adjusted net-mining revenue scales, the total, as reported, could reach 55 percent.
That is on top of profit—windfall or otherwise—plus national, local, value-added, real-property, capital gains, stock-transaction, withholding and documentary taxes. Let’s not even go to where regulatory fees, extra charges and the like are demanded on top of these.
Mining in the Philippines, despite obscene profits, is considered a “small player,” with a yearly tax-revenue contribution of 0.9 percent.
In comparison to its Asian neighbors, the Asian Development Bank’s office of Regional Economic Integration said, in effect, the mining industry in the Philippines lags behind its mining counterparts in Thailand (6.9 percent); Malaysia (22.5 percent); and Vietnam (18.3 percent) in tax-revenue contribution.
Based on National Statistics Office (NSO) figures, as of 2010, there were 110 companies engaged in mining and quarrying activities in the country. Its total number of workers amounting to a little over 26,000, with gold ore, copper ore and nickel ore mining posting over 6,000 workers, respectively.
The NSO also said, “Total compensation paid by all mining and quarrying establishments to their employees in 2010 amounted to P7.1 billion, translating to an average annual compensation of P264,438 per employee.”
Running mining operations is hardly a trivial matter. Cost can reach as high as billions, but with modest return on investment (or so they claim). The NSO reported, “Total cost, excluding compensation, incurred by all mining and quarrying establishments in 2010 amounted to P59.6 billion. Revenue per cost ratio for all mining and quarrying establishments was estimated at 1.76. This means that for every peso spent, corresponding revenue of P1.76 was generated.”
Be that as it may, running off with a country’s most precious metal resources, such as gold, copper and nickel, hardly puts mining companies in the running for Ms. Congeniality. Often frowned upon for the devastation mining leaves in its wake, it is only right that mining companies should be taxed in ways that should make them think twice before ravaging a country’s resources. No matter the fat figures these firms contribute to employment, all that comes to naught after all’s been sucked dry.
Mining leaves the country as a victim of the axiom “the end justifies the means.” The least this country can do is demand enough tax revenue from mining companies to buy back whatever we have lost come the day we need it.
Image credits: Jimbo Albano