House panel not ‘fast-tracking’ passage of fiscal regime for mining bill

The House of Representatives ways and means panel is not “fast-tracking” the passage of a bill establishing the fiscal regime for the mining industry.

Nueva Ecija 1st District Rep. Estrellita Suansing made the statement on Tuesday during deliberations by a technical working group (TWG) on the still unnumbered substitute bill to House Bills 422 and 7994.

This came after Camarines Sur 2nd District Rep. Luis Raymund Villafuerte Jr. aired his proposal to impose a different royalty tax on the small-scale mining industry, as well as on non-metallic mining.

“We simply cannot lump the small-scale with the large-scale mining… This should really be studied dahil grabe ang impact nyan sa small-scale and they will not survive. I know we want to fast-track this…” he said.

But Suansing cut him at this point and said: “It’s included in the Sona (State of the Nation Address) that’s why we’re hearing this.

“We are not fast-tracking this. Please lang ha, be careful,” she added.

The approval of the bill imposing a 5 percent royalty against all mining contractors for all metallic and non-metallic mining operations, whether large-scale or small-scale, has been delayed anew because the mining industry, as well as some lawmakers, have requested more time to study the effects of the tax on the industry.

Because of this, the panel has asked the Department of Finance (DOF) to run the numbers on the possible revenue of the government should they proceed with the 5 percent royalty.

READ: Imposition of royalty on all mining operations eyed

The bill imposes a royalty:

– if within mineral reservations, 5 percent of the market value of the gross output of the mineral products extracted, exclusive of all other taxes;

– if outside mineral reservations, 3 percent on the first three years of upon the effectivity of the Act, 4 percent on the fourth year and 5 percent on the fifth year.

At present, a royalty is imposed only on mine sites declared as mineral reservations.

The mining industry continues to oppose this, saying the royalty should instead be based on the margin or profit of a mining company.

Chamber of Mines of the Philippines Chair Gerardo Brimo also said their sector is proposing the following: (1) 4 percent excise tax, (2) 5 percent of gross revenues on nickel mining, (3) 2 percent royalty based on income for open-pit mining of copper, gold and other metallics, (4) 1 percent tax on income for underground mining, and (5) the windfall profits tax.

“[The windfall profits tax] is applied to income from mining operations before corporate income tax and it’s tied to operating margins. So the higher the margin of a mining company, the higher the tax that will be applied,” Brimo explained in a previous hearing.

The DOF and the mining industry has yet to achieve a compromise on these issues.

Surigao del Sur 2nd District Rep. Johnny Ty Pimentel has also noted that if the mining taxes imposed are too high, these could kill the mining industry.

The panel has agreed to wait for the statistics from the DOF before proceeding with the approval of the bill at the committee level.  /muf

READ: House not backing down on plan to ban open-pit mining