Marcos inks Enhanced Fiscal Regime for Large-Scale Metallic Mining Act

President Ferdinand ''Bongbong'' Marcos Jr. signed Thursday the Enhanced Fiscal Regime for Large-Scale Metallic Mining Act, which aims to simplify and rationalize the fiscal regime for large-scale metallic mining by removing tax distinctions based on mining agreements. 

The signing ceremony took place at the Kalayaan Hall in Malacañang Palace.

In his speech, the President said the signing of the law would put into place a system that is fairer, clearer, and more responsive to the needs of both the people and the environment.

''Gone are the days when a mining contractor can bury its profits beneath the weight of losses. No longer can we use the one project’s failure to conceal another project’s success,'' Marcos said. 

''Transparency is now the rule, accountability our standard, and fairness the measure by which we move forward,'' he added.

The new law seeks to ensure an equitable share of mining revenues for the government while upholding the principles of transparency, accountability and good governance in the mining industry.

Among the salient features is imposing a 5-tier, margin-based royalty at rates ranging from 1% to 5% on income from metallic mining operations outside mineral reservations, and a minimum royalty rate of 0.1% on gross output for mines below the margin threshold. 

It will also introduce a 5-tier, margin-based windfall profits tax at rates ranging from 1% to 10% on income from metallic mining operations.

Further, the law will implement a 2:1 debt-to-equity ratio or a thin capitalization rule applicable to related-party debt, to limit the amount of tax-deductible borrowing costs arising from the debt.

Under the law, Marcos said that the Bureau of Internal Revenue and the Bureau of Customs would examine and audit all sales and exports of minerals and inspect mining company records, in coordination with the Mines and Geosciences Bureau.

Local government units will also receive 40% of the gross collections from excise taxes on mineral products, royalties, and other taxes or fees.

''This ensures that the communities who bear the brunt of mines will also experience their benefits,'' Marcos said.

In a separate statement, Special Assistant to the President for Investment and Economic Affairs Secretary Frederick Go said the signing of the law marks a significant milestone in positioning the Philippine mining sector as a key player in the global value chain.

''By modernizing the industry's fiscal regime, we aim to drive economic growth, especially in support of green technologies while protecting our environment and natural heritage,'' Go said.

"Through this law, we aim to foster inclusive prosperity-ensuring that our countrymen, our communities, and our future generations benefit from the responsible use of our mineral resources," he added. —  RSJ, GMA Integrated News