House panel OKs bill establishing fiscal regime for mining industry

October 9, 2018 at 10:43

House panel OKs bill establishing fiscal regime for mining industry

By: – Reporter |  / 04:34 PM October 08, 2018

A House of Representatives committee on Monday approved a bill establishing the fiscal regime for the mining industry.

The ways and means panel approved the still unnumbered substitute bill to House Bill Nos. 422 and 7994.

Committee chair and Nueva Ecija 1st District Rep. Estrellita Suansing said the bill proposes to retain the imposition of the corporate income tax (CIT) on the mining sector “to level the playing field among all other sectors.”

It also retains the existing tax regime on excise tax, royalty to indigenous peoples, local business tax, and real property tax.

The proposed measure also provides for a margin-based imposition of royalty on mining operations within and outside mineral reservations, whether small or large scale, ranging from 1 percent to 5 percent:

  • 1 to 10 percent margin: 1 percent royalty
  • above 10 percent up to 20 percent: 1.5 percent royalty
  • above 20 percent up to 30 percent: 2 percent royalty
  • above 30 percent up to 40 percent: 2.5 percent royalty
  • above 40 percent up to 50 percent: 3 percent royalty
  • above 50 percent up to 60 percent: 3.5 percent royalty
  • above 60 percent up to 70 percent: 4 percent royalty
  • above 70 percent: 5 percent royalty

Margin refers to the ratio of income from mining operations before CIT to gross output.

Large-scale metallic and non-metallic mining contractors within mineral reservations should also pay the government a royalty equivalent to the 3 percent of the gross output of the minerals or mineral products extracted or produced by the mining operations, exclusive of all other taxes, the bill said. This is a decrease from the original House proposal of a 5 percent royalty.

Meanwhile, small-scale mining operators within or outside mineral reservations, should pay a royalty amounting to 1/10 of 1 percent of gross output.

The bill will also prohibit open-pit mining, Suansing said.

She added that under the bill, all mining contractors would be exempted from the confidentiality clauses of the National Internal Revenue Code, “to ensure transparency compliance of the extracted industries transparency initiative.”

“To improve monitoring and regulation,” small-scale miners will also be required to register with the mining board, according to Suansing. /je

Source: https://newsinfo.inquirer.net/1040314/house-panel-oks-bill-establishing-fiscal-regime-for-mining-industry




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