New policy: Miners to pay ‘thousandfold’

Miners should expect to pay higher occupational and application fees of up to a “thousandfold more” under the new mining policy recently submitted by the Department of Environment and Natural Resources (DENR) to the Office of the President, Environment Secretary Ramon Paje said on Friday.

But other revenue-generating schemes such as higher royalties and the removal of tax holidays would be put on hold pending legal reviews, he added.

“The contentious issue is the revenues. The President [expects us to] optimize our revenues from mining. Based on the laws, we will utilize all provisions to optimize our revenues,” Paje said in a media interview Friday.

The new mining policy would make sure that miners pay higher occupational and application fees. Currently, miners pay a one-time application fee of P50,000, after which they fence off the plot of land and leave it undeveloped. Because lot owners are required to pay the occupational fee of P60 per hectare only when the land is placed under a Mineral Processing Share Agreement, leaving the land idle has led to government losses of P760 million, Paje said.

This practice has also produced mineral speculators who drive up the cost of land for legitimate mining companies, the DENR official added.

‘You reserve, you pay’

To discourage the practice and implement a new revenue-generating scheme, the government, “will raise [occupational and application] fees a thousandfold,” Paje said. “The moment you reserve a land under your name, you pay,” he added.

Paje said raising these administrative fees was an easy way to generate more revenues for the government. However, big-ticket schemes like removing the eight-year income tax holiday and the 5-percent royalty tax on mining companies “will be deferred … and studied by a council that will be formed,” he explained.

But mining companies have vowed to challenge moves to raise taxes in the Supreme Court, saying that government cannot issue new taxes without new legislation.  In the meantime, they are waiting for a clear mining policy from the Aquino administration. Since last year, the DENR has not approved any mining contract or permit, saying that the government needs to get more from the mining industry.

Meager contribution

According to the DENR, the mining industry’s contribution to government has remained small compared to its recent earnings. Mines and Geosciences Director Leo Jasareno said that the mining industry’s contribution to the country’s gross domestic product “has not been able to break the 1.5-percent barrier for a long time now.

“The government also loses P5 billion every year from not collecting royalty fees from mining companies,” Paje added.

There are 31 mining companies in the Philippines. Small-scale miners number between 200,000 and 300,000. Permits and mining claims cover 1.14 million ha or 3.8 percent of the country’s total land area.