TWG created to study proposals to rationalize fiscal regime applicable to mineral agreements

House of Representatives | 17 September 2018 08:57:20 PM

The House Committee on Ways and Means chaired by Rep. Estrellita Suansing (1st District, Nueva Ecija) today created a technical working group (TWG) that will study the bills pertaining to the establishment of a rationalized fiscal regime applicable to all mineral agreements.

The TWG to be headed by Suansing is tasked to study House Bill 7992, which seeks to amend Chapter VII Title VI and Section 151, and create new Sections 151-A and 151-B, of Republic Act No. 8424, otherwise known as the National Internal Revenue Code of 1997, as amended. These will be done by establishing a rationalized and single fiscal regime applicable to all mineral agreements and retaining the imposition of corporate income tax on the mining sector, among others.

The bill, authored by Suansing, proposes to retain the imposition of the corporate income tax (CIT) on the mining sector to level the playing field among all other sectors. It also proposes to impose an additional government share when the basic government share is less than 50 percent of the net mining revenue.

The other proposal is HB 422, authored by Rep. Romero Quimbo (2nd District, Marikina City), seeking to establish the fiscal regime and revenue sharing arrangement between the government and the mining contractor for large-scale metallic mineral mining operations, wherein the government share shall be 10 percent of gross revenue or 55 percent of the Adjusted Net Mining Revenue (ANMR), whichever is higher.

Former President and now House Speaker Gloria Macapagal-Arroyo was present in the hearing.

In her opening speech, Suansing said the committee hearing is pursuant to President Rodrigo Duterte’s urgent call during his third State of the Nation Address for Congress to pass before the end of this year, a legislation on a rationalized fiscal regime for the mining sector, one that will secure for the government a reasonable and increased share in the profits derived therefrom without compromising the said industry’s growth.

“The Committee begins the arduous yet worthy task of deliberating on the two measures filed for the purpose,” Suansing said.

Suansing assured that the Committee will give fair treatment. “The Committee is in charge to balance between what the Department of Finance wants and what is comfortable to you [mining companies],” she stressed.

She said the first step of the TWG is to prepare a matrix of the bills for easier comparison and study.

Department of Finance (DOF) Assistant Secretary Ma. Teresa Habitan proposed to retain the mining corporate income tax at 30 to 25 percent, the excise tax at four percent, ancestral domain royalty at one percent and local business tax at 1.7 percent.

Habitan said it should be recognized that the State owns the resources. “The State, therefore, is entitled to a payment as these resources, once mined, are not renewable. As responsible miners, this is a philosophy we should all recognize,” Habitan said.

Moreover, the DOF proposed to:

1. Impose royalty applicable to all metallic and non-metallic minerals, small and large-scale mines, mineral (MR) and outside mineral reservations (OMR);
2. Impose Additional Government Share (AGS) on all which is the difference between 50 percent of NMR and basic government share;
3. Introduce thin capitalization and ring-fencing; and
4. Introduce amendments to the NIRC of 1997, as amended.

Atty. Danilo Uykieng, Assistant Director of the Mines and Geosciences Bureau (MGB) of the Department of Environment and Natural Resources (DENR), said small scale mining or Minahang Bayan is governed by Republic Act 7076. The capitalization of small scale mining is set at a maximum of P10 million. It is largely labor artisanal in nature. The purpose of the small scale mining law is to provide livelihood to a large number of rural areas constituents, he said. | Novel Paller

Source: http://www.congress.gov.ph/press/details.php?pressid=10909