OceanaGold seeks CTA suspension of BIR excise tax order

OceanaGold Corporation, operator of the Didipio cooper-gold mine in Nueva Vizcaya has asked the Court of Tax Appeals to suspend the Bureau of Internal Revenue's recent imposition of excise taxes on its operations.

 

“We have filed for a suspension order but we will continue to pay it (excise tax) until the area (for taxation) is finally determined,” OceanaGold country director Bradley Norman said Friday.

 

Norman said OceanaGold wants the CTA to clarify which incentives its mining operations are entitled to under its Financial or Technical Assistance Agreement (FTAA) with the government.

 

OceanaGold's CTA petition comes a month after the Bureau of Internal Revenue (BIR) issued a memorandum circular, which, according to BIR Commissioner Kim Henares, provides that “FTAA contractors are liable to pay the taxes due under the NIRC (National Internal Revenue Code) and existing rules and regulations during and after their “recovery period.”

 

The circular also provides that FTAA holders shall pay the income tax after the income tax holiday granted to them has lapsed.

 

“We have an FTAA signed in 1994 and a lot of changes have happened since then so we have to determine what taxes have to be paid and in what form.,” Norman said.

 

“We will follow the legal process regarding this and we will be happy to pay the taxes that we have to pay. This is more of a cash flow issue than a profitability issue for the company,” he also said.

 

OceanaGold chairman Jose Leviste had claimed that during the "recovery period" they are exempt from paying taxes.

 

In late February, OceanaGold suspended its transport of concentrate from the mine and then resumed in early March after paying the excise tax “under protest.” — ELR, GMA News