Seeking to increase the public share in the mining industry, Senator Joel Villanueva said Tuesday (May 2) that he has filed a bill to reform the mining fiscal regime and to mandate transparency in the extractives sector.
Villanueva said that Senate Bill No. 1166, the “Maximizing Benefits from Mineral and Mineral Products and Quarry Resources Act,” requires companies to pay royalty to the government for all its mineral mining operations.
“It is the Filipino people who are the inherent owners of the country’s extractive resources. The public deserves nothing less than our fair share from the use of these resources. The country’s current fiscal regime does not provide for the adequate and equitable payment by mining companies for the extraction of minerals. It is high time we correct this,” Villanueva stressed.
Mining companies are required to pay royalties on top of the corporate taxes and fees they paid as business enterprises. However, not all mining companies are required to pay taxes under the current system. In 2015, royalty payment amounted to only 1.21% of the estimated total value of mineral industry in the same year.
“While we recognize our benefits from the industry, we also cannot deny the negative social and environmental impacts of mining operations in the country. These are costs that the mining industry needs to account for to make sure we are not at the losing end in allowing private companies to use our resources,” Villanueva added.
Senate Bill No. 1166 aims to generate more jobs in the mining sector by encouraging the development of local downstream industry. The bill seeks to do this by taxing the export of raw ore to discourage outflow of unprocessed mineral and encourage domestic manufacturing. Under the proposal, raw ore export will be taxed 20% by 2018, 40% by 2019, and 60% by 2020. The bill aims to prohibit the exportation of raw ore by 2021 to strengthen the link of mineral extraction to manufacturing in the long-run.
Write-up by: Freddie Velez, Manila Bulletin