Cimatu favors higher tax on mining firms

The Department of Environment and Natural Resources on Thursday said it would "absolutely" support any measure seeking to impose higher excise tax on mining companies.

“Absolutely, yes. Kailangan,” DENR Secretary Roy Cimatu said.

In his second State of the Nation Address last July, President Rodrigo Duterte warned all mining stakeholders to practice responsible extraction and utilization of resources, or he will tax them “to death.”

“You have to come up with a substitute, either spend to restore the virginity of their source or I will tax you to death,” Duterte said.

“I will increase the taxes. Then I will think of something that will compensate or make up for the damage or at least the income restored. Otherwise, I’ll have to stop mining. I will ask you to stop it. It’s not good,” he added.

While he has yet to determine the amount of hike on excise tax that must be enforced on mining firms, Cimatu cited a previous study proposing an increase of 5 percent from the current 2 percent.

He said the proposal was met with criticisms by mining firms, adding that he will raise the matter to the interagency Mining Industry Coordinating Council.

“We have to plan properly how much of financial and so forth and so on. But mukhang maliit ‘yung 2 percent,” Cimatu said.

According to a report by Reuters, the Philippines is the world’s biggest supplier of nickel ore and also among the top producers of copper and gold. However, the sector contributes less than one percent to the country’s economy, based on data from the Mines and Geosciences Bureau.

Under Republic Act No. 7942, or the Philippine Mining Act of 1995, government gets a 50 percent share in profits of foreign miners operating in the Philippines under Financial or Technical Assistance Agreements, and a 2 percent excise tax on actual market value of output under Mineral Production Sharing Agreements with local companies.

In July, Duterte pitched for new legislation on mining, saying the industry pays too little in tax and not enough in compensation for any environmental damage.

“I’d like to tell you frankly. We would come up with a new legislation because [Pantaleon] Bebot Alvarez, the [House] Speaker, hates mining. And he comes from a mining town,” he said.