Reshaping the tax landscape of the mining industry

The Philippine mining industry has undergone a tax overhaul, and it is far more than a surface-level polish. With Republic Act (RA) No. 12253, otherwise known as the Enhanced Fiscal Regime for Large-Scale Metallic Mining Act, signed by President Ferdinand R. Marcos, Jr. on Sept. 4, 2025, the government is set to reshape how the wealth buried beneath our mineral-rich soil is distributed.

- DANA DANIELLE F. UGANIZA

Prior to RA 12253, the mining industry operated under a patchwork of tax rules and regulations which often raised concerns about potential gaps in enforcement and revenue collection. Key issues included the seemingly selective imposition of royalties on operations within mineral reservations, leaving highly profitable ventures outside these zones largely unregulated. Companies also had the flexibility to offset losses across different projects, potentially masking the true profitability of individual operations. Further, the absence of restrictions on related-party borrowing allowed entities to claim excessive interest deductions, significantly reducing taxable income.

These persistent gaps underscored the need for a more equitable regime leading to the passage of RA 12253, as applicable to all large-scale metallic mining operations. This landmark legislation introduced several key reforms intended to address longstanding issues in the mining industry and reshape how mining operations are regulated in view of the government's principles of accountability, transparency and good governance in the management of mineral resources.