By James Konstantin Galvez Reporter
The inter-agency mining body expects to submit by June this year a bill seeking a 10-percent share in mining projects’ gross revenue, the Department of Environment and Natural Resources (DENR) said on Thursday.
In a media briefing, Environment Secretary Ramon Paje said that the Mining Industry Coordinating Council (MICC) would submit the bill seeking to simplify revenue sharing between the government and mining companies, through a “unified” tax collection system.
“What we want is to get a fair share from the finite resources,” he added.
The government’s present share in mining and exploration is only in the form of income tax, representing 2 percent of earnings of the 30 operating mining companies. At the current level, the government can only collect of P800 million a year from these mining companies.
“But with the simplified revenue collection, the government can collect at least P10 billion annually,” Paje said.
Instead of collecting various taxes, the DENR chief said that a mining company would be required to pay 7 percent to 10 percent of their gross revenue to the government.
“Our proposal is that 5 [percent]to 7 percent will be fixed collection based on the gross revenue of the company, while the remaining 3 percent will be based on windfall,” he said.
He also noted that the amount of shares collected would depend on the amount of investment injected by a miner in a particular project.
“If it only requires low investment, in terms of infrastructure and processing, we will impose higher tax, while bigger investments will have to pay lower taxes,” Paje said.
Earlier, the MICC said that it has narrowed down to two options for taxing mining companies—percentage of gross margin or part of gross revenue—in arriving at a fair revenue sharing scheme between the government and the minerals industry.
The MICC said that the government may take a percentage of the company’s gross margin or a percentage of gross revenue, where income tax paid is deducted after computing the government share.
Under either of the two schemes, the government would use international benchmarks for metals prices available on the London Metals Exchange as well as accepted cost for mineral ore production.
“The President [Benigno Aquino 3rd] assured us that the proposed bill, which will be submit before the opening of the new Congress, would be certified urgent. We are optimistic that it will be passed by December this year,” Paje said.