New hope for Phl mining

The Congressional bicameral conference committee recently ratified the proposed rationalization of the country's mining fiscal regime, which the Department of Finance expects to create a fair and equitable mining environment for all.

- MARY ANN LL. REYES

The said bicam committee report on the conflicting provisions of Senate Bill 2826 and House Bill 8937, or the Enhanced Fiscal Regime for Large-Scale Mining Act, was signed last June 11. It is one of the Legislative-Executive Development Advisory Council (LEDAC) priority measures for the 19th Congress and was supported by President Marcos.

It will be submitted for the President's signature.

According to the DOF, the reform delivers a long-overdue update to the outdated tax structure governing the mining sector. It simplifies the fiscal system, guarantees the government's fair share of revenues, strengthens environmental safeguards, and provides fiscal predictability and stability for investors, all while promoting responsible and sustainable mineral development.

It explained that under the current fiscal regime, the obligations of mining groups and companies vary depending on the mining agreement, resulting in a complex tax structure. It also imposes only royalties, which is government's share from the extraction of the non-renewable resources, for mines operating within a mineral reservation.

With the proposed measure, the fiscal regime on mining will be simplified by removing the tax distinctions on mining agreements. It also introduces mechanisms to ensure that the government will get its fair share. More specifically, a margin-based royalty tax on mines operating outside mineral reservation and a windfall profits tax on all mines will be imposed, wherein the approved version adopts fewer tiers on the two new taxes for easier compliance and administration to discourage tax avoidance.

The bill also scrapped the controversial Senate provision that would have imposed a raw ore export ban.