House panel fast tracks mining fiscal regime

Bantay Kita questions the decision of the House of Representatives – Committee on Ways and Means in fast-tracking the approval of the unnumbered substitute bill to establish the fiscal regime for the mining industry.
 
The bill proposes a margin-based royalty on income for all metallic mining operations outside mineral reservations i.e. margin of 1% up to 10% shall pay 1 percent royalty. The Committee also lowered royalty payments of mining operations within mineral reservation, from 5 percent to 3 percent.
 
The Committee on Ways and Means also accepted the motion to remove provision on surcharge and banning open pit mining. Speaker Gloria Macapagal-Arroyo who proposed provision agreed into its deletion – this is contradictory to her recent pronouncements to push for a total ban on open pit mining in the Philippines.
 
Bantay Kita consistently proposes 5 percent mineral royalty payments on all mining operations that would add a total of at least Php 2.5 billion to government revenue. This is also administratively more feasible in terms of transparency and ease of collection. Royalties are to guarantee payments to the government as resource owner. The margin-based royalty on income of operations will not ensure payments for minerals, and if royalty is profit-based, the government will be collecting less over the mine life. Also, will profit information be publicly disclosed so that the community can monitor proper payment of taxes? Will the costs of operations be disclosed publicly? Congress should ask for simulation of tax collection – the government might end up with even lower tax take before the increase in excise tax.
 
Bantay Kita appeals to the Congress to approve tax regime that ensures fair and equitable share from the one-time extraction of the country’s mineral resources.