Govt earned P40.7B from mining in 2013

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The Chamber of Mines of the Philippines (COMP) on Wednesday maintained that the extractive industry contributed PHP40.7 billion to government coffers in 2013, contrary to a statement by the 2015 Country Report of the Philippine Extractive Industries Transparency Initiative (EITI).

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Citing the same Philippine Extractive Industries Transparency Initiative 2nd Country Report covering FY2013 used by Bantay Kita, COMP said oil and gas revenues totaled PHP35.3 billion while revenues from the mining sector amounted to PHP5.4 billion. These amounts come only from the 20 material companies and four energy companies that participated in the initiative and with gross sales of PHP1 billion.

“The oil and gas sector is included in the extractive or mining industry although it is regulated by the Department of Energy,” said Nelia Halcon, executive vice president of COMP, in a statement.

Halcon also stressed that while the large-scale miners, which participated in the initiative contributed to the smaller chunk of the pie in 2013, “mandatory expenditures incurred by our mining companies for the benefit of our host communities and the protection and rehabilitation of impacted areas, must not be dismissed.”

“Bantay Kita should also look at the total taxes paid by the mining sector which includes metallic and non-metallic mines aggregating to PHP25.8 billion in 2015 as indicated in the Mines and Geosciences Bureau (MGB) website. This excludes excise tax which will be made available by the Bureau of Internal Revenue (BIR) in September,” she added.

Bantay Kita, a coalition of organizations pushing for transparency and accountability in the extractive industry, earlier revealed that large-scale miners paid a mere PHP5.4 billion to government or 0.003 percent of total government revenues in 2013, based from the 2015 Country Report of the Philippine Extractive Industries Transparency Initiative.

Beyond shaping up and complying with environmental laws, Bantay Kita said, the mining industry should give the government a higher share as payment for the finite minerals they extract.

The group claimed that in 2013, large-scale mining companies only paid 1.21 percent of their estimated sales of PHP73.4 billion as a unique payment for the minerals on top of the regular taxes which all businesses in the country pay.

Bantay Kita estimates foregone revenues at PHP4.5 billion in the form of tax incentives granted to seven firms in 2013.

The sector has generated less than one percent of total employment for the past decade, according to MGB data. Bantay Kita said this is due in part to the sector’s highly mechanized nature and the absence of a labor-intensive processing industry in the Philippines. Bulk of the country’s minerals is exported as raw, with no value added, to China and Japan.

COMP members, meanwhile, pointed out how they complement the government’s delivery of social services by providing vital infrastructures, including roads, schools, provision of water systems, housing and health services.

“In 2013, a total of PHP2.9 billion was poured by the 20 mining companies into their respective Social Development and Management Programs (SDMP). The SDMP has a life cycle of five years and reporting expenditures on a yearly basis may not provide a holistic assessment of the program. This is our commitment to help in inclusive growth, especially in rural development where majority of the impoverished are,” said Halcon.

Corporate income tax and excise tax on minerals each contributed 27 percent to the total government share from the mining sector with royalties from mineral reservation contributing 15 percent. The rest came from value added tax (VAT) on imported materials and equipment and other taxes.

“What must be ensured now is the timely remittance of the tax shares of our host communities, something which we could address in further endeavors of the PH-EITI where Bantay Kita is a partner,” said Halcon.

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