A bill seeking a new fiscal regime for the mining sector—approved on third and final reading last Tuesday by the House of Representatives—tweaks the National Internal Revenue Code (NIRC) of 1997.
The measure, embodied in House Bill (HB) 8937, creates four new sections—151-A, 151-B, 151-C, and 51-D—in the NIRC, or Republic Act (RA) 8424 (as amended).
Once enacted, the House-approved measure will subject large-scale metallic mining operations within mineral reservations to a royalty rate of 4 percent of the gross output of the minerals or mineral products extracted or produced.
A margin-based royalty on income from metallic mining operations would be imposed on large-scale metallic mining operations outside mineral reservations.
The bill said large-scale metallic mining operations within mineral reservations shall be subject to a royalty rate of 4 percent of the gross output of the minerals or mineral products extracted or produced by metallic mining operations, exclusive of all other taxes.
It said large-scale metallic mining operations outside mineral reservations shall be subject to a margin-based royalty on income from metallic mining operations.
It added that pursuant to Section 13 of the People’s Small-Scale Mining Act of 1991, there shall be levied one-tenth of one percent of the gross output of the minerals or mineral products extracted or produced by small-scale metallic mining operations.
In addition to the taxes imposed under the NIRC, a windfall-profit tax would also be imposed for each taxable year on income from metallic mining operations.
Under the bill, all metallic mining contractors shall provide the Bureau of Internal Revenue (BIR) with a copy of approved marketing contracts and sales agreements, including those submitted to the Mines and Geosciences Bureau, on all sales and exports of minerals, mineral products, and raw ores.
It also mandates the Mines and Geosciences Bureau to require metallic mining companies to submit a report for each shipment before leaving the loading ports. The report shall be shared with the Department of Finance (DOF) and the BIR, the measure reads.
The BIR shall be entitled to examine and audit for tax purposes all sales and exportations of minerals, mineral products, and raw ores, including the terms and conditions of all sales commitments.
HB 8937 received affirmative votes, four negative votes and one abstention.
