COMPANIES belonging to the Chamber of Mines of the Philippines cited two studies commissioned by the Department of Environment and Natural Resources and the Department of Finance that revealed the country’s mining taxes are already high.
The group that represents the industry’s major players noted that the increase was due to the doubling of the excise tax to 4 percent after the enactment of Republic Act 11534, or the Create law , in 2018. The tax systems refer to those imposed on mining projects under the Mineral Production Sharing Agreement , those operating inside MRs and those under the FTAA.
The miners’ organization noted that such mining tax regime is not unique to the Philippines as both Chile and Peru, the Number-1 and Number-2 top copper producers in the world, respectively, follow the formula. Canada, a top mineral producer, has a similar income-based royalty. The COMP further pointed out that the windfall-profits tax is yet another new imposition on the industry that applies to all mining companies, whether operating in MRs or not. Because it is like a “windfall,” it starts at an operating margin of 35 percent with the tax rate increasing as margins increase—another example of a progressive tax.
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