By Billy Begas
The House of Representatives on early Tuesday morning approved on third and final reading a measure enhancing the fiscal regime for the local mining industry.
With 272 votes in favor, four negative, and one abstention, the House approved the proposal that will amend the National Internal Revenue Code of 1997 (Republic Act 8424).
“No less than the Chamber of Mines of the Philippines has expressed support for the measure as it went through the legislative process in the House. I agree with the chamber that the fiscal changes being introduced by this bill will help the country’s post-pandemic economic recovery,’ Speaker Ferdinand Martin Romualdez said.
Under the measure, large-scale metallic mining operations within mineral reservations will be subjected to a royalty rate of 4% of the gross output of the minerals or mineral products extracted or produced.
A margin-based royalty on income from metallic mining operations would be imposed on large-scale metallic mining operations outside mineral reservations.
Meanwhile, a royalty rate equivalent to one-tenth of 1% for small-scale metallic operations will be imposed.
The measure also requires small-scale miners to register with the Mines and Geosciences Bureau and the Mining Board of the concerned local government unit (LGU) and encourage them to organize into cooperatives to qualify for the awarding of a People’s Small-Scale Mining Contract.
In addition to the taxes imposed under the National Internal Revenue Code, a windfall profits tax would also be imposed for each taxable year on income from metallic mining operations.
“Through the bill, the mining industry proves itself as a key partner of the government in nation-building,” Romualdez said.
The measure also directs all metallic mining contractors to provide the Bureau of Internal Revenue (BIR) a copy of approved marketing contracts and sales agreements, including those submitted to the Mines and Geosciences Bureau (MGB), on all sales and exportation of minerals, mineral products, and raw ores.
The MGB shall also require metallic mining companies to submit a report for each shipment before leaving the loading ports. The report shall be shared with the Department of Finance (DOF) and the BIR,” it added.
The BIR shall be entitled to examine and audit for tax purposes all sales and exportation of minerals, mineral products, and raw ores, including the terms and conditions of all sales commitments.