In
At present, mining companies are liable for corporate income tax, excise tax, royalty, local business tax, real property tax, and royalties to indigenous communities, which effectively add up to 38% of a mining company's income. The bill seeks to increase this effective rate to up to 51% through additional royalties, windfall profits tax, export tax, and ring fencing.
Before it is enacted into law, the Committee-approved bill will undergo two more readings in the
ROYALTIES
The bill seeks to impose royalty payments on mining companies operating outside mineral reservations. At present, only mining companies operating inside mineral reservations are liable for the 5% royalty based on gross output.
WINDFALL PROFIT TAX
The bill also seeks to impose a windfall profit tax, which would be an additional imposition on a mining company if its total tax payments fail to meet the specified minimum government share from mining contracts. Under the bill, the minimum government share from all mining contracts would be 60% of net mining revenues.
At present, windfall profit tax is imposed only on mining companies operating under Financial and Technical Assistance Agreements (FTAAs) and the minimum government share for mining companies with FTAAs is 50% of net mining revenue. On the other hand, mining companies operating under Mineral Production Sharing Agreements (MPSAs) are not subject to windfall profit tax.
EXPORT TAX
In addition, the bill seeks to impose a 10% export tax (based on the market value of mineral ore exports) to encourage domestic processing of mineral products.
RING FENCING
Lastly, under the bill, a mining company will be treated as a separate taxpayer with respect to each of its mining contracts. Also known as ring fencing, this rule seeks to increase the tax base by ensuring that losses from other mining projects will not be deducted from the more profitable ones.
LIFTING OF MORATORIUM ON MINERAL AGREEMENTS
On
The whereas clauses of EO No. 130 noted that Republic Act No. 10963 (the TRAIN Act) has doubled the rate of excise tax on minerals, mineral products, and quarry resources from 2% to 4%, the country has tapped less than 5% of its mineral resources, and that the mining industry can support various government projects. EO No. 130 also directed the
In addition, EO No. 130 provides for the strict implementation of mines safety and environmental policies by the DENR, directing the DENR to “ensure strict implementation of and compliance with the recommended measures of the
FUTURE OF MINING IN
The present government is looking to the mining industry to aid in the country's economic recovery. Finance Secretary
Recently, or on
However, while these recent events have shown the likely growth of the mining industry in
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