MGB opposes proposed single tax scheme for mining

MANILA, Philippines – The Mining Industry Coordinating Council (MICC) may scrap the proposed unified tax collection scheme for the mining industry in a bill it drafted following a concern raised by the Mines and Geosciences Bureau (MGB).

Under the draft bill titled, “Philippine Mining Revenue Sharing Arrangement Act of 2013,” MICC seeks a government share of 10% of gross production value of mining projects or 50% of gross income, whichever is higher.

Environment Secretary Ramon Paje said Monday, September 2 said the MGB raised a concern regarding the proposal and submitted its own recommendation to the council.

MGB Director Leo Jasareno wrote Nestor Arcansalin, director of the Resource Base Industries Department of the Board of Investments, saying the tax scheme being eyed will result in lower government share in mining revenues.

“For instance, in the case of the gross production value of mining for the year 2011, which is P163.2 billion, the total taxes paid by mining contractors during the same year amounted to P22.2 billion. This is equivalent to 13.6% of gross production value,” he explained.

“If this is the case, we are instead proposing to just implement the present fiscal tax regime but less the incentives plus 5% of the gross sales as royalty payment, applicable to both mineral and non-mineral reservation areas,” he said.

Paje said MGB’s proposal will still go through deliberations by MICC.

MICC is an inter-agency body created by virtue of Executive Order No. 79 – the Aquino administration’s mining policy. The council is tasked to formulate a fair revenue-sharing arrangement between government and mining firms.

“Whatever we submit to the President and to Congress should be better than the existing revenue-sharing scheme,” Paje stressed.

“And natural resources are finite resources. We should be able to get an equitable share from it,” he added. – Rappler.com