Mining tax change has just begun — DoF

January 3, 2018 at 14:00

Mining tax change has just begun — DoF

mining

The increase in certain mining levies in the first of up to five planned tax reform packages may turn out to be just the government’s opening salvo on the sector. — AFP

 

THE DOUBLING of a mining levy under the first of up to five planned tax reform packages enacted last week will not preclude further changes to the sector’s fiscal regime, an official of the Department of Finance (DoF) has said.

“The first package does not preclude us from continuing with the study and recommending the different fiscal regime…” Finance Assistant Secretary Maria Teresa S. Habitan told reporters on Thursday last week when asked if mining taxes would form part of succeeding tax reform packages.

“Package five kasi talaga ang mining,” Ms. Habitan added.

“So the question is what they are paying the government — is it enough and are we sharing enough?”

Her remarks signal continuation of a policy adopted by the administration of former president Benigno S. C. Aquino III that had imposed in July 2012 a moratorium on new mining projects until the government revises the sector’s fiscal regime in order to get a bigger slice of its revenues.

Republic Act No. 10963, enacted last Dec. 19, increased the excise tax rate for nonmetallic and metallic minerals — including copper, gold, and chromite — to four percent from two percent, and on indigenous petroleum to six percent from three percent starting Jan. 1, 2018.

Asked if the sector could expect more changes as early as in the second tax reform package that DoF plans to submit to Congress next quarter, Finance Undersecretary Bayani H. Agabin told reporters: “Not on the horizon.”

But he said future changes could include royalties and local government fees miners have to pay. Besides excise tax, miners also need to pay corporate income, value added, real property and local business taxes, as well as royalties to host indigenous communities, among others.

“So the fiscal regime will have to address… especially revenue sharing between the government and private contractor. So ’yun ’yung issues that are under consideration ’dun sa study na ginagawa,” said Ms. Habitan.

Sought for comment, Chamber of Mines of the Philippines Executive Director Ronaldo S. Recidoro said in a mobile phone message: “We’d like to see faster [sic] LGU (local government unit) shares in mining revenues” but added that the group would wait for the DoF’s next proposal before giving further views.

Miners in the country have complained that their sector is the most heavily taxed among peers in Southeast Asia, and 2015 DoF simulations estimated that the industry had an average effective tax rate of 62%.

A bill filed in the House of Representatives that year — but which failed to win legislative approval before the Aquino administration ended its term in mid-2016 — had sought to increase that rate to 71%.

Source: http://bworldonline.com/mining-tax-change-just-begun-dof/




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