• Philippine Resources

Lawmakers invoke House rule so that bill tweaking tax structure on miners can sail


CITING a need to have a “rational” tax structure imposed on miners, lawmakers invoked a rule allowing for a one-day hearing to tweak a proposal for taxes applied on mining operations.


This was what Albay Rep. José María Clemente Salceda said after the House Committee on Ways and Means approved on Monday House Bill 5022, which seeks to establish a fiscal regime for the mining industry.


In an interview, Salceda said his committee invoked House Rule 10, Section 48, or the one-day hearing only for bills that have been approved on third reading in the previous Congress. The consolidated bill was approved because the committee invoke the rule.


According to Salceda, the bill approved by the committee could provide P25 billion additional revenues to the government in five years.


“In this committee-approved bill, we removed from [this tax proposal] the metallic and nonmetallic [operations] due to the ‘Build, Build, Build’ program [of the Duterte administration],” he added.


The lawmaker said the bill pushes for an equitable imposition of royalty on mining operations within and outside mineral reservations.


For her part, House Committee on Ways and Means Senior Vice Chairman Estrellita B. Suansing said there is a need to create a rationalized and single fiscal regime applicable to all mineral agreements to promote fairness.


“This aims to level the playing field, so to speak, considering that under the current taxation setup, only mining contractors inside the mineral reservations pay the royalty tax,” Suansing, who is also the principal author of the bill, said.


She added that the bill proposes an equitable imposition of royalty on mining operations—whether small-scale or large-scale—within and outside mineral reservations.


Under the proposal, a 3-percent royalty tax shall be imposed on large-scale mining operations within a mineral reservation.


The bill also said a margin-based royalty tax shall be imposed on large-scale mining operations outside mining reservation areas, ranging from 1 percent to 5 percent.


The measure added that small-scale mining operations shall be exempt from the payment of royalty.


Currently, the law requires payment of royalty fees only in mining sites declared as mineral reservations.


The measure also proposed the creation of the Natural Resource Trust Fund, a sovereign wealth fund for use by local governments where mines are located.


The bill said failure to comply with this obligation shall warrant immediate suspension or closure of the mining activities of the contractor concerned.


To ensure utmost care in fund handling, the bill said the fund shall limit discretionary spending until the next administration.


“The fund shall be used by local government units to support educational programs, technological, resarch programs of local relevance, disaster risk management, rehabilitation of abandoned mines and health services programs of the communities directly affected by mining activities,” Salceda said.


The bill also seeks to optimize revenues from mining agreements through an auctioning system to be established by the Mines and Geosciences Bureau (MGB).


The measure acknowledges that mining operations deleteriously affect the carrying capacity of the environment, to the detriment of future generations.


The measure optimizes revenues from mining agreements through an auctioning system, to be established by the MGB. This will minimize awarding of mineral agreements based on asymmetrical information, first-come, first-served system and patronage politics. Moreover, it shall promote investments in mineral-rich areas through an online portal open to the public.


The measure institutionalizes the nation’s participation in the Philippine Extractive Industries Transparency Initiative provided under Administrative Order 2017-07 by the Department of Environment and Natural Resources requiring full public disclosure in the mining industry, particularly in revenue collection and tax payments.


Source: https://businessmirror.com.ph/2019/11/19/lawmakers-invoke-house-rule-so-that-bill-tweaking-tax-structure-on-miners-can-sail/

PHILIPPINE RESOURCES JOURNAL ​

2nd Floor, Suite 6,

Corinthian Plaza Building,

Paseo De Roxas, Legaspi Village,

Makati, Philippines

Phone: +632 251 5599

Subscribe to Our Newsletter

  • White Facebook Icon

© Philippine Resources Journal