MANILA, Philippines - The Mining Industry Coordinating Council (MICC) is studying two options for a new revenue-sharing scheme between the government and the mining industry that will both be benchmarked on world metal prices.
The government may take a percentage of mining companies' gross margin or gross revenue, where income tax paid is deducted after computing the government share, the Department of Trade and Industry, which is a member of the council, said.
The MICC said in both cases, the government would use international benchmarks for metals prices available on the London Metals Exchange as well as for internationally accepted cost for mineral ore production.
The MICC will decide on this soon in a bid to restructure the current tax system to a "single fiscal regime" from the present two, eliminating issues on valuation of outputs and costs of production.
The two current revenue-sharing schemes are based on the mining agreement: an excise tax for the mineral production sharing agreement, and a percentage of net mining revenue under a financial and technical assistance agreement.
“The new scheme will strive to strike a balance between raising government revenue and keeping a fiscal regime that is competitive with other developing countries,” the MICC said.
The council said it wants a new revenue scheme that supports the Philippines’ entry into the Extractive Industries Transparency Initiative, the internationally-accepted practice which makes the payment and collection of all mining-related fees and taxes paid by mining companies to national and local government units more transparent through standardized disclosures.The MICC also proposes that the arrangement include the creation of a one-stop process in new areas designated as mining zones, like the Philippine Economic Zone Authority which would process and facilitate all mining industry requirements.
The taxes government will get from the mining industry will be earmarked for public environmental programs.
The formulation of a new mining revenue-sharing agreement is in line with the provisions provided by Executive Order 79 signed by President Aquino earlier this year to address mining issues in the country. The revenue-sharing scheme is one of the contentious provisions in the EO that is still hanging as Congress still needs to deliberate on it. - Rappler.com
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