BSP reports P7 B in gold purchases for first half

The Bangko Sentral ng Pilpinas (BSP) has reported P7 billion in gold purchases from small miners during the first half of this year even as a “status quo” has been declared on plans for the BSP to start collecting a two-percent excise tax on such sales.

The BSP had agreed last June to start collecting the excise tax although it was initially opposed to the proposal on the ground that it is not authorized to make such collection and that the collection of such tax would scare away the small miners who could instead sell their gold to the black market.

Sources in the Bureau of Internal Revenue (BIR) said a status quo has been ordered since it turns out that the BSP may be right about questioning its authority to collect the two-percent excise tax on gold sales.

The BIR wants to scrutinize the charter of the BSP which may indeed prevent the BSP from making such collection in behalf of the BIR.

The Department of Environment and Natural Resources projects that some P500 million in revenues could be collected from such gold sales.

The BSP’s agreement to collect the excise on gold purchases was given during the June meeting of the MDC in which the DENR and BSP are members along with the Department of Finance, the Department of Trade and Industry and the National Economic and Development Authority.

The BSP had been under pressure to collect the tax as part of the government’s effort to increase tax collection.

The BIR had proposed a directive that would compel the BSP to act as a collecting agent for excise taxes applicable to gold sold to the BSP.

The BSP has opposed the collection, arguing that it would force the sellers to sell elsewhere to avoid the payment of taxes.

Additionally, the BSP had also felt that there is a legal question on whether the BIR could direct the BSP to act as a withholding agent without an act of Congress.