SENATOR Joseph Victor G. Ejercito on Tuesday sponsored in plenary a measure that may increase the government’s share from mining profits by imposing a five-tier margin-based tax system on the mining industry.
Under Senate Bill No. 2826, the five-tier margin-based royalty rate would range from 1-5%, with the measure also seeking to establish a five-tier windfall profit tax system that ranges from 1-10%.
“This proposed concept will enable the government to have a larger share of the profits in cases when metal prices are high, and mining companies are earning more,” Mr. Ejercito said in his sponsorship speech.
The House of Representatives approved its version of the measure in September last year.
Under House Bill No. 8937, large-scale miners in mineral reservations must pay the government only 4% of their gross output. It also sought to set up a margin-based royalty rate of 1.5-5% with eight tiers, and a 1-10% windfall profit tax with 10 tiers.
The Senate bill seeks a royalty rate of 5% from large-scale miners inside mineral reservations based on gross output, with those outside reservations following the proposed five-tier margin regime.
Citing estimates from the Department of Finance, the government is expected to generate P6.26 billion in additional yearly revenues from the new mining tax regime. — John Victor D. Ordoñez