Mining companies, beware. The government is eyeing to increase excise taxes on mining as part of the Duterte administration’s campaign to maximize profit from the sector.
In a news briefing on Thursday, Environment Secretary Roy A. Cimatu said he is pushing for a significant hike in the excise taxes imposed on mining companies. He added this is in line with President Duterte’s instruction to him to study options on how the country can fully benefit from mining.
“Absolutely, yes, kailangan [it is needed],” Cimatu said when asked if he is in favor of increasing excise taxes on mining. Mining companies are mandated to pay 2-percent excise tax to the government based on the gross value of ores and minerals.
As to how much increase the government is eyeing to impose, Cimatu did not give a clear answer, but said some proponents placed it at 5 percent. “Well, there was this study before, there were some proponents before [who want] to increase the 2 percent to 5 percent.”
However, these proposals were not welcomed by mining companies, saying a 5-percent excise tax is just too much, according to Cimatu. “These are the things that we have to plan properly, how much financial and so forth and so on. But the 2-percent excise tax seems too little,” Cimatu said in English and Filipino.
“There is no absolute value for the increase, yet. I think I will be bringing this to the MICC [Mining Industry Coordinating Council] as part of a policy recommendation later,” Cimatu added.
The environment chief also said he is looking into “other options or modalities in getting what is inside the bowels of the Earth, aside from open-pit mining,” as directed by the President during their Cabinet meeting on September 4.
“He also instructed me not to allow mining in watersheds and to require mining companies to plant trees in barren areas within the company concession, which are not utilized for mining,” Cimatu said. He added the President is not totally against open-pit mining and is even willing to give mining companies some elbow room to apply reforms.
“Mining companies will be given that elbow room [as] he [Duterte] said this in the Cabinet meeting. But, eventually, at some point in the future, open-pit mining will have to return, or turn, to more environmentally accepted methods,” Cimatu added.
As to the mining operations ordered shut down by former Environment Secretary Regina Paz L. Lopez, Cimatu said he is scheduled to meet the members of the MICC on October 24 to receive and discuss the recommendations of the mining audit.
As environment chief, Cimatu sits as cochairman of the MICC. He, however, declared that he would vote on matters that will decide the fate of the suspended mining operations. “But I will hear their arguments for me also to be guided.”
On the other hand, Cimatu said he has yet to make a stand on the plan to mandate mining companies to acquire legislative franchises before they can operate. “I said I will wait for the bill about the franchise, about the mechanics of that.”
“My bottom line is that it should define the wish of the President for responsible mining; make sure that the proper taxes will be given. Also, if ever, we have to process our minerals here to have a better revenue for the country because, as of now, the mining industry is only contributing about less than 1 percent of the GDP,” Cimatu said.