MINING companies said a proposed tax regime based on margins earned plus a charge on windfall profits is consistent with the input the industry provided to legislators during consultations.
At a forum organized by the Chamber of Mines of the Philippines on Monday, St. Augustine Gold and Copper Ltd. Chief Operating Officer Michael G. Regino said, “the politicians talked to us, the mining industry, and they said there is a need for us to increase our taxes. We agreed to it and what came out is an acceptable deal.”
Philex Mining Corp. Chief Executive Officer Eulalio B. Austin added: “We at the Chamber of Mines… have been participating in the discussions (ahead of the drafting of the mining tax bill)… if there are additional taxes they should be profit-based and not charged against gross income.”
On Monday, the House of Representatives approved on second reading the New Mining Fiscal Regime Bill or House Bill No. 8937.
“The gist of that bill is, as long as the taxes will be on net income and not on gross revenue, it’s okay for the miners,” Mr. Regino added.
Mr. Austin added that further mining taxes should also “be profit-based and not be based on gross.”
“We were able to make some headway on that. It is why the new mining taxes are now profit-based or margin-based royalties,” he added.
The bill also imposes a tax on windfall profits depending on their size.
Operators with margins of more than 35% but less than 40% are liable for taxes of 1%, while those with margins of more than 80% will be charged 10%.
“If you have a windfall you will be taxed more, if you don’t have a windfall its basically regular income; you won’t be taxed as much,” Mr. Regino added.
The proposed new tax on miners is one of the priority measures of President Ferdinand R. Marcos, Jr. as outlined in his State of the Nation Address in July.
According to the Department of Finance, revenues generated from mining taxes may hit P12.4 billion in 2025, P12.9 billion in 2026, P13.4 billion in 2027, and P13.9 billion in 2028.
Philex Mining is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Metro Pacific Investments Corp. and PLDT Inc.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — Adrian H. Halili
