Tax relief encourages gold sales to BSP

MANILA, Philippines — Local miners are once again selling their gold produce to the Bangko Sentral ng Pilipinas (BSP) following the reduction in the creditable withholding tax on gold sales implemented in November last year, the Department of Finance (DOF) said.

In a text message forwarded by Finance Secretary Carlos Dominguez, Bureau of Internal Revenue (BIR)- Baguio City regional director Douglas Rufino said the central bank has purchased P1.5 million worth of gold from local miners in January.

He said this was an improvement since 2012, wherein there was a lack of willing gold traders to the BSP.

“I am proud to report that an initial of P1.5 million worth of gold was sold to Central Bank- Baguio for the month of January 2018 finally from almost zero sales since 2012,” Rufino said.

Dominguez attributed the increase in the domestic sales of gold to the recent lowering of the creditable withholding tax on gold sales to one percent from the previous five percent, which was enforced late last year.

According to the finance chief, the tax reduction is beneficial not only to local miners, but also to the BSP and the national government.

“The advantages to the seller are lower transportation costs and assurate assays; the advantage to the BSP is the use of pesos to buy gold, which is used as our international reserve. The advantage to the government is the collection of one percent witholding tax versus zero in the past,” Dominguez said.

The BIR has issued Revenue Regulation 7-2017 reducing the creditable withholding tax rate on gold sales, encouraging small scale miners to sell their gold produce to the BSP.

Excise tax imposed on gold sales was retained at two percent under the new issuance.