Fiscal regime in mining industry sought anew
Credit to Author: GLEE JALEA| Date: Thu, 03 Oct 2019 16:17:44 +0000
ALBAY Rep. Joey Salceda has filed a measure that seeks an equitable imposition of royalty on mining operations within and outside mineral reservations.
Under House Bill (HB) 5022, which failed to pass in the 17th Congress, the royalty rate will be reduced from 5 percent to 3 percent for large-scale mining contractors within mineral reservations, while a margin-based royalty tax ranging from 1 to 5 percent will be imposed on large-scale mining operations outside mining reservation areas.
It also proposes to exempt small-scale metallic mining operations from paying royalty.
The current law requires such payment only in mining sites declared as mineral reservations.
HB 5022 will also put up a natural resource trust fund to be used by local governments where mines are located. This will be created from the annual payment of mining contractors to the Bureau of Internal Revenue (BIR) of an additional 2-percent based on gross output for large-scale metallic mining, which will be remitted to the Bureau of the Treasury within the first quarter of the succeeding income year.
“On top of providing funds for rehabilitation of abandoned mines, prior to the enactment of Republic Act 7942, the fund accumulates resource revenues from mining operations and extends their benefits to the next generations through educational programs, technological and research programs, health services, and disaster risk-reduction management initiatives,” Salceda said in his explanatory note.
The fund will be used to support educational programs, technological, research programs of local relevance, disaster risk management, rehabilitation of abandoned mines, and health services programs of the communities directly affected by mining activities.
The bill also optimizes revenues from mining agreements through an auctioning system to be established by the Mines and Geosciences Bureau.
“This will minimize awarding of mineral agreements based on asymmetrical information, first-come first-served system, and patronage politics. Moreover, it shall promote investments in mineral-rich areas through an online portal open to the public,” said Salceda.
The bill also promotes participation in the Philippine Extractive Industries Transparency Initiative, which requires full public disclosure of revenue collection and tax payments in the mining industry.