Duterte signs law on tax perks for small gold miners
PRESIDENT Rodrigo Dutere has signed a law exempting small-scale gold miners from paying income and excise taxes.
Republic Act (RA) 11256, inked by Duterte on March 29, is expected to boost the country’s gross international reserves (GIR).
It amended Sections 32 and 151 of the National Internal Revenue Code, which slaps five percent withholding taxes and two percent excise taxes on the sale of gold to the Bangko Sentral ng Pilipinas (BSP).
Under the newly-signed law, registered small-scale miners and accredited traders who are selling gold to the BSP are exempt from paying income and excise taxes.
“All gold sold to the Bangko Sentral ng Pilipinas by accredited traders shall be presumed to have been purchased by said traders from small-scale miners,” RA 11256 read.
“The sale of gold by small-scale miners, as defined under Republic Act No. 7075 (People’s Small-scale Mining Act of 1991), to accredited traders for eventual sale to the Bangko Sentral ng Pilipinas, shall enjoy the same tax treatment and privileges given to the direct sale of gold to the Bangko Sentral ng Pilipinas under the Tax Code,” it added.
The law also provides that those who already paid excise tax prior to the sale of gold to the BSP may file a claim for refund or credit with the commissioner.
RA 11256 was a consolidation of Senate Bill 2127 and House Bill 3297 signed on January 29 and February 6, respectively.
Senate ways and means committee chairperson Juan Edgardo Angara, who just received a fresh mandate as senator, earlier noted that between 2005 and 2010, the BSP purchased close to one million troy ounces of gold or 2,362 gold bars produced from small-scale mining activities.
Angara said the BSP’S gold purchases drastically declined to 35,000 troy ounces in 2012 after BIR imposed the tax requirement in 2011 and further slid to 14,700 troy ounces of gold in 2017.
In September 2016, Angara said the BSP was only able to purchase 7,600 troy ounces or an equivalent of 19 gold bars.
The law will take effect 15 days after its publication in the Official Gazette or in a newspaper of general circulation.
Sixty days after the law’s effectivity, the BSP governor, secretaries of Environment and Local Government departments, and Internal Revenue commissioner are mandated to recommend to Finance Secretary the rules and regulations necessary for the effective implementation of RA 11256.
The rules and regulations will include provisions for the registration and accreditation requirements of small-sale miners and traders in order to avail of the tax exemption under the law.
The Palace released a copy of the law on Wednesday, May 22./Sunstar Philippines