Mining council studies revenue sharing scheme proposal

MANILA, Philippines - The Mining Industry Coordinating Council (MICC) is deliberating on the proposal of the Mines and Geosciences Bureau (MGB) for a simplified revenue sharing scheme between the government and the mining industry.

Environment Secretary Ramon Paje said yesterday that there were concerns that the present proposal of obtaining a 10 percent share from gross production value would fetch an annual collection that is lower than the existing tax payments of mining contractors.

“There was a concern raised by the MGB that the present proposal might result in collection that is lower that the existing,” Paje told reporters yesterday.

The proposal by the MGB stipulates the implementation of the present taxation scheme but incentives given to mining firms would either be lessened or eliminated. Also, the existing five percent royalty imposed on projects operating in mineral reservations would be applied to all tenements.

Under the present system, mining companies pay the regular corporate income tax, two percent excise tax, business tax, royalty payments for indigenous peoples directly affected by mining operations, and royalty for mineral products extracted from mineral reservations.

Paje said the proposal would still be deliberated upon by the MICC.

“Whatever we submit to the president and to the congress should be better than the existing revenue sharing scheme,” he said.

Paje noted that only 11 companies have projects within mineral reservations.

Paje said it is also being considered if MGB’s proposal can be implemented in small scale mining.

He said MGB’s proposal has merit because it secures an equitable share for the government from the start and end of operations.