Sereno: Govt gets no share in mining profits

MANILA, Philippines – Chief Justice Maria Lourdes Sereno said Tuesday, July 30 the Supreme Court may have no choice but to review the profit sharing between government and mining companies under the Mining Act.

During the latest round of oral arguments on the constitutionality of the law, Sereno said the government has not gotten any share in mining profits since 2004 other than taxes.

“Government is getting nothing,” she said.

A group led by former Akbayan partylist Rep. Risa Hontiveros filed a petition before the SC asking the high court to declare as unconstitutional sections 80 and 81 of Republic Act 7942 or the Mining Act of 1995.

Read: Mining chamber to argue revenue-sharing issue in SC

Section 80 states the total government share in a mineral production sharing agreement shall be the excise tax on mineral products. Section 81 deals with the government share in Financial or Technical Assistance Agreements or FTAAs.

Former SC Justice Florentino Feliciano from the side of the mining firms however argued that “taxes paid by mining companies are included in the concept of benefits” the government receives.

“[The] government risked zero and they get zero. It is just leveling the playing field,” he noted.

The taxes mining firms are required to pay include customs duties, capital gains, real estate, royalties, local taxes and VAT.

Former SC justice Vicente Mendoza, who represents the Chamber of Mines, said the Philippines is not the only country in the world where taxes are considered as government share in mining. He said the US, Canada, Australia and Chile have the same law. He added this “cannot be said to be disadvantageous” to government.

Belmonte: Congress is right venue

In a letter to the Solicitor General Francis Jardeleza, who is representing government in the SC case, House Speaker Feliciano Belmonte said that only “the legislative and executive branches of the government… have the authority, capability and resources to resolve economic questions and other policy matters.”

“For those who believe that the current mining law is flawed or deficient, there is no lack of remedy at the legislative level for any perceived inadequacy in the Mining Act. Congress remains an open venue – and is the correct venue – to address these concerns.

In a separate letter to Jardeleza, Finance Secretary Cesar Purisima gave the assurance that the executive department is working on amending the fiscal component of the mining law. – Rappler.com