Drilon bats for increased taxes from mining sector

A lawmaker has filed before the Senate a measure seeking to increase government earnings from mining companies in the country.

Senator Franklin Drilon, through Senate Bill No. 225, is seeking an increase of as much as 10 percent in the annual gross revenues from mining companies.

The bill seeks that the government gets 10 percent of a miner's gross revenues or a 55-percent share in adjusted net mining revenue (ANMR) yearly, whichever is higher.

"The State shall get a fair and equitable share of the revenues and economic benefits derived from the mining resources. Any economic rent arising from such exploration, extraction and utilization belongs to the State," the bill read.

The total government share will then be divided between the national and local governments at a 60-40 percent scheme in favor of the national government.

"If passed into law, the bill would introduce a new fiscal regime and revenue sharing arrangement between the government and mining contractors for large-scale metallic mineral mining operations," Drilon said in an emailed statement.

According Drilon, the bill also provides for speedier remittances as it mandates that the local government shares must be received within ten days from the end of each quarter.

The payment of government shares will be in lieu of all national and local taxes. This includes corporate tax, royalty for the indigenous cultural communities, duties or imported specialized capital mining equipment, fees for permits, and other fees and charges being imposed by the host LGUs.

This compares with the current revenue sharing formula where the government gets a 50-percent share in profits of foreign miners operating in the Philippines under Financial or Technical Assistance Agreements (FTAA). It also gets a 2-percent excise tax on actual market value of output under Mineral Production Sharing Agreements (MPA) with local companies.

Sought for comment, the Chamber of Mines of the Philippines (COMP) maintained its position that 10 percent of gross revenues is "too high."

"Will need to see a copy of the bill before we can comment. But if it's identical to the bill filed in the 16th Congress, we've given our position on it already. 10 percent of gross revenues is simply too high," Ronald Recidoro, COMP VP for Legal and Policy, said in a text message.

To recall, a similar bill drafted by the inter-agency Mining Industry Coordinating Council (MICC) was filed before the 16th Congress as House Bill (HB) No. 5367 on February 3, 2015.

This was widely opposed by COMP, even appealing to Malacañang to review such proposed taxation system.

"We are dismayed that the MICC has moved forward with a proposed increased tax policy without taking into consideration comments and observations not only from the mining industry that will be directly affected by said policy but by authoritative third parties," COMP said in a letter to then Executive Secretary Pacquito Ochoa, Jr.

The measure, according to COMP, "cannot, by any measure, be considered as fair or equitable."

A new revenue sharing scheme has been highly anticipated in the mining industry after a nationwide ban on the grant on mining permits in 2011 pending the passage of a revenue sharing bill. —NB, GMA News