FINANCE Secretary Benjamin E. Diokno said Congress needs to promptly pass tax reform legislation for the mining industry, saying foreign investors are likely to find a simplified tax regime more attractive.
“With the expected congressional approval of a new tax system for mining, plus the roadshows being conducted abroad, there will be renewed interest in the (mining) industry,” he was quoted as saying in a statement issued by the Presidential Communications Office.
Mr. Diokno made the remarks in an interview with ABS-CBN News Channel.
Mr. Diokno said many potential investors from Canada have shown interest in the Philippine mining industry.
“They signified a lot of interest in our new economy and also given the new tax regime,” he said, citing the results of a recent roadshow in Canada.
The proposed new tax regime for the mining sector is “one of the priority measures of the Congress,” Mr. Diokno said, “and we expect it to be approved soon.”
He said the goal is to harmonize the tax treatment of mining that takes place in designated reservations with that of operations outside reservations.
“We will just have one tax. We will simplify the tax system and some royalties also. But we will try to make the tax system on mining competitive with other countries. That’s the gist of that proposal,” he added.
Economic managers have said that mining could be a key driver of the economic recovery.
The Chamber of Mines of the Philippines last year opposed a House of Representatives bill that sought to raise the effective tax rate on mining to 51% from 38% and impose a 5% royalty on the market value of gross output for large-scale mining operations.
Gerard H. Brimo, the chamber’s vice chairman, said earlier this month that the industry would prefer a margin-based royalty and windfall profits tax, noting the practice in many countries.
The chamber has shown support for House Bill No. 373, which proposes a margin-based royalty on large-scale miners outside of mineral reservations.
The bill, which is still with the House ways and means committee, also proposes a windfall profits tax that is likewise based on margins. — Kyle Aristophere T. Atienza