Angara to miners: Sell your gold directly to the gov’t
Reelectionist Senator Juan Edgardo “Sonny” Angara on Wednesday urged small-scale miners to sell their gold directly to the government and help build the country’s foreign exchange buffer.
Angara, who is running for another term in the Senate in the upcoming May 2019 midterm elections, reminded small-scale miners that they could soon avail of tax exemptions if they sell their gold to the Bangko Sentral ng Pilipinas (BSP) instead of the black market.
Angara said this would be done as soon as the so-called “Gold Bill,” or Senate Bill No. 2127, which he authored and sponsored as chair of the Senate committee on ways and means, is signed by President Rodrigo Duterte. The measure has been transmitted to Malacañang.
The measure, once signed into law, would enable the BSP to better build up the Gross International Reserves (GIR) by buying domestically produced gold from small-scale miners using Philippine peso.
The bill seeks to amend Sections 32 and 151 of the National Internal Revenue Code to make the sale of gold from small-scale miners to the BSP exempt from income and excise taxes.
The tax exemptions cover proceeds from “sale of gold by registered small-scale miners” and “sale of gold by registered small-scale miners to accredited traders for eventual sale to the BSP.”
“By selling their gold to the BSP, our small-scale miners will not only help the BSP shore up the country’s gross international reserves (GIR), but they will also be assured that they will receive a fair price for their gold unlike in the black market where prices are below market levels,” said Angara.
Angara is scheduled to visit on Wednesday, April 10, Compostela Valley, which has the largest gold deposits in the country, with 10 out of 11 towns in the province hosting one or more gold mines.
The GIR is the sum of all foreign currencies, including gold, held by the BSP. It serves as a buffer to ensure that the Philippines would not run out of foreign reserves that it could use to pay for imported goods and services, or maturing obligations in case of external shocks, Angara explained.
In March 2019, data from the BSP showed that the country’s GIR rose to $83.2-billion from $82.78 -billion in February, which is enough to cover 7.3 months’ worth of imports of goods and payments of services and primary income.
Angara said he believes that buying gold from the domestic market would boost the GIR as opposed to purchasing gold using dollars, which affects the money supply with potential inflationary effects.
Angara said the measure would help support the development of the small-scale mining industry as envisioned by Republic Act 7076, or the People’s Small-Scale Mining Act of 1999.
“The legislation would have the effect of assisting the BSP in the fulfilment of its mandate under its charter, returning to the formal sector the sale of gold from small-scale miners as originally envisioned under RA 7076,” Angara said.
Angara noted that the volume of gold sold to the BSP declined drastically when the BSP started to withhold and remit to the national government the two (2) percent excise tax and five (5) percent withholding tax on its purchase of gold from small-scale miners and traders, pursuant to a revenue regulation issued by the Bureau of Internal Revenue (BIR).