Mining council to consider tax reform impact on industry

THE MINING Industry Coordinating Council (MICC) will meet this month to study the proposed fiscal reforms for the mining industry that are part of the Finance department’s upcoming tax reform package.

“I think they will submit (the proposal) to us, the MICC. So we’ll have a meeting toward the end of the February,” Finance Undersecretary Bayani H. Agabin told reporters on the sidelines of the Competition in Development Countries forum yesterday in Makati City.

However, he did not elaborate on any possible adjustments to taxes.

“We’re looking not only at the tax component, but also the royalties side,” Mr. Agabin said.

“I don’t think there is (a proposal for) a new fiscal regime for mining,” he added.

He said that there are proposals in Congress that ban the country from exporting raw minerals, which Mr. Agabin said is a “technical issue. So we would rather leave that to the DENR ( Department of Environment and Natural Resources).”

“And there is a bill which says that we have to get a franchise from Congress to be able to mine — that is also a policy issue so we will leave that to the discretion of the Congressmen and Senators,” he added.

Mr. Agabin said that the interagency committee will take into consideration environmental impacts while deliberating on the proposed measure.

“When it comes to mining, we don’t just have to look at the revenue side… it’s not only revenue but also changing behavior,” he said.

“I think when it comes to mining, we cannot isolate revenue. There has to be some balancing there, for the environment, future generations, adverse impacts; its a one-time resource,” Mr. Agabin added.

Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion law, which became effective last month, provided for a doubling of excise taxes for minerals.

Input from the MICC meeting — in which the Department of Finance (DoF) and the DENR are co-chairs — will be factored into the next round of tax reform measures.

Aside from higher taxes for the mining sector, the Finance department is also looking at further increases for tobacco and alcohol taxes.

The DoF initially planned to submit the reform package as a draft bill to Congress on Jan. 31, but said it will be delayed for two weeks.

The second package highlights include the lowering of corporate income taxes to 25% from 30% and removing value- added tax exemptions on coal and casinos. —