PCCI opposes removal of ITH for mining sector

MANILA, Philippines – The Philippine Chamber of Commerce and Industry (PCCI) is against the removal of the income tax holiday (ITH) for mining firms because it is provided for in the law.

“We are against the removal of the ITH. They cannot just change the law,” Philippine Chamber of Commerce and Industry (PCCI) president Miguel Varela told The STAR in an interview.

According to Varela, he is not certain if a law can be amended through an order signed by the President. The Mining Act was passed by both houses of Congress. Its validity was also upheld by the Supreme Court.

“Maybe another law is needed in order to remove the ITH,” Varela said.

Varela warned that changing the rules in the middle of the game could drive away investors. “We are on a roll here. We are getting good investments that is why the government should think twice before they remove the incentives.”

The incentives for the mining industry is in the mandatory list of the Board of Investments as per the Mining Act.

This means that BOI is required to give them ITH, and unlike other items in the IPP it is not subject for review.

However, in an earlier interview acting director of the Mines and Geosciences Bureau (MGB) Leo L. Jasareno said that the law on the ITH is not absolute because it is given under certain conditions.

Jasareno said there are some who feel that miners should not be given a seven year ITH because sometimes seven years is the life of the mine so they end up not paying any ITH at all.

The controversy over the removal of the ITH arose when an alleged draft of the new mining policy was released.

Jasareno clarified that they did not release any draft mining policy and they do not accept ownership to the draft. But because the industry reacted to it, they are carefully considering some of the suggestions.

Jasareno said the mining policy includes provisions that is directed towards small scale miners. He said the solution is to not allow illegal small scale miners. He explained that small scale mining is illegal when the permit is from the city mayor and not the governor and if the small scale miners use heavy machinery.

Small miners must get the permit from the provincial governor of the specific area.

Under the mining policy, Jasareno said small-scale miners would have a specific area which would be known as the “minahan ng bayan.” The national anti-illegal mining task force would implement the ban on illegal mining. Currently, Jasareno said small scale illegal miners operate with impunity.

To stop the illegal miners, Jasareno said they could concentrate on banning dynamite and mercury. Once there is no supply of these hazardous materials then miners would not be able to use them.