THE Chamber of Mines of the Philippines (CoMP) said it hopes the proposed fiscal regime for the mining industry is signed into law before the middle of the year.
“We’re hoping to get that bill passed into law before the first half is over, Para ma-report din ng Presidente as an accomplishment (So the President can report it as an accomplishment),” CoMP Executive Director Ronald S. Recidoro told reporters, apparently referring to the State of the Nation Address delivered to Congress in late July.
The proposed fiscal regime seeks to impose margin-based royalties and a windfall profit tax on mining companies.
The Department of Finance is proposing a margin-based royalty of 1.5-5%, with only four tiers, compared to the 10 tiers in House Bill (HB) No. 8937.
Large-scale metallic mining operations inside mineral reservations will still pay the government the equivalent of 5% of their gross output.
The House of Representatives approved HB 8937 on third and final reading in September.
“We came up with (five tiers) … A slight tweak to the DoF version,” he said.
“We think we can work with this fiscal regime. So we’re hopeful kasi maraming investors ’yan din lang ang binabantayan eh, na nakalutang ’yung tax regime (Many investors are waiting for a resolution on the tax regime),” he added.
Mr. Recidoro said that the new mining tax regime should be based on profits and not gross output.
“We are in agreement already on the principles of what a proper fiscal regime should look like. It should be based on profit rather than gross. Taxes are really heavy when based on gross,” he said.
He added that the mining industry is “somewhat in agreement” with the DoF that a fiscal regime should be based on profit margins.
“We think it’s equitable (and) competitive versus other countries,” he said.
Separately, CoMP Chairman Michael T. Toledo said the passage of a new mining tax regime will remove uncertainties currently deterring foreign investors.
“Because (this is) one of the reasons why foreign investors as well as domestic investors are also quite reluctant to invest,” Mr. Toledo added.
The government expects to generate P5.5 billion from royalties on miners operating within mineral reservations, P1.31 billion from royalties on miners operating outside reservations and P3.37 billion from windfall profit taxes.
Mining companies currently pay corporate income tax, excise tax, royalty, local business tax, real property tax, and fees to indigenous communities. — Adrian H. Halili