The Mines and Geosciences Bureau (MGB) is more partial to adjusting the excise tax slapped on mining firms based on their minerals production than peg the increase at a uniform rate.
Interviewed during the 64th Annual Mine Safety and Environment Conference (ANMSEC) in Baguio City last Thursday, MGB Director Wilfredo G. Moncano said the agency will soon come up with its proposal for hiking the excise tax on mining firms.
The MGB, an attached agency of the Department of Environment and Natural Resources (DENR), is the government’s primary mining regulatory body.
“There has been a lot of discussion about this. In Congress, there’s a pending bill on increasing the fiscal regime. In the industry, they have been talking about this, too. In the MGB, we also have our own discussion,” Moncano said. “Although nothing is really final, one of the things that we are talking about is whether it will be a uniform increase or whether it will be per-commodity basis like should gold, for instance, have a 5-percent increase, too, the same with nickel? Our [MGB] direction is to push for a per-commodity basis increase” he added.
In declared Mineral Reservation Areas, mining companies are already paying an additional 5 percent for royalty on top of the 2-percent excise tax, but the Duterte administration believes the government deserves a bigger share in mining revenues.
Environment Secretary Roy A. Cimatu earlier said the DENR is now looking at a study proposing to increase the excise tax on mining from 2 percent to 5 percent.
Before Republic Act 7942, or the Philippine Mining Act, was signed into law, the taxes for minerals already stood at around 5 percent. As part of a mining revitalization program and in order to attract more investments in the sector, the government decided to bring it down to 2 percent.
Moncano said the MGB will come up with its proposal for increasing the mining tax within the year. The fiscal regime on the mining industry may now be included in the succeeding packages of the government’s comprehensive tax-reform package, an official of the Department of Finance earlier said.
Finance Undersecretary Bayani H. Agabin said the multistakeholder Mining Industry Coordinating Council, which is cochaired by Finance Secretary Carlos G. Dominguez III and Cimatu, is set to undertake the review of thefiscal regime.
“We are looking at this to be part of one of the tax-reform packages,” Agabin had said in an earlier report.
Currently, there is also a pending bill in Congress that seeks to compel mining firms to give the government 10 percent of its gross revenues, or 55-percent share in its adjusted annual mining revenue.
House Bill 5367 argues that the government is “the owner of the minerals.” The passage of a new mining tax law is one of the preconditions for the lifting of the ban on the processing of new mining projects as mandated by Executive Order 79 signed by former President Benigno S. Aquino III on July 6, 2012.
Since then, annual mining investment has nosedived by as much as 50 percent. Coupled with stringent rules rolled out by former Environment Secretary Regina Paz L. Lopez, minerals production also slowed and failed to hit targets