By Chino S. Leyco
The Department of Finance (DOF) expects higher revenues once the proposed amendment to the existing fiscal regime covering all mining operations is passed into law.
During a House ways and means committee hearing yesterday, Finance Assistant Secretary Ma. Teresa S. Habitan said the DOF expects P11.29 billion in next five years from the reforms in the mining sector.
“There is a need to amend the existing mining fiscal regime and further enhance the equitable share of the government in the utilization of natural resources,” Habitan told the lawmakers during the deliberation on the DOF-backed House Bill (HB) No. 7951 filed by Rep. Estrellita Suansing.
Under the DOF revenue program, the proposed measure would generate P1.83 billion next year, P1.94 billion the following year, P1.86 billion in 2021, P2.5 billion in 2022 and ultimately, P3.16 billion in 2023.
“To promote fairness, a rationalized and a single fiscal regime applicable to all mining is proposed to be imposed on all,” Habitan said.
The DOF official said the proposed tax regime will apply to all existing and prospective large metallic, non-metallic, and small-scale mines as well as shall be applied to all mine sites.
If passed into law, HB 7951 will tax all mines located outside and inside a mineral reservation, she said.
Currently, only those within mineral reservations are being required to pay a royalty.
“The proposal retains the royalty rate of five percent for those currently located inside a mineral reservation, and a phased-in rate for those outside mineral reservation,” Habitan said.
Based on the DOF’s proposed phased-in rate schedule, a three-percent royalty will be imposed during the first three-years upon the effectivity of the law, four percent on the fourth year and five percent on the fifth-year and thereafter.
The DOF, meanwhile, proposed to retain the existing impositions such as corporate income tax, excise, indigenous people royalty and local business tax on all mines.
“The government seeks to impose a uniform fiscal regime regardless of the nature of the agreement or the size of the mining contractor which are based on the same source, the minerals,” Habitan explained.