DENR defers to DOF decision on mining tax issues
The Department of Environment and Natural Resources (DENR) is letting the Department of Finance to (DOF) decide on the taxation of the industry which will facilitate the lifting of the moratorium imposed on new mineral agreements.
This after the interagency Mining Industry Coordinating Council (MICC) decided to defer the DENR’s recommendation on the lifting of the moratorium on new mining projects as provided under Executive Order 79.
“We will just defer in terms of decision on the position of the DOF. This is about tax so it is really more of the DOF,” Environment Under- secretary Analiza Teh told reporters on Thursday.
“According to the DOF, the excise tax is not enough and that more reforms have to be undertaken. They are also looking at the royalty and not just excise. Although there is a two percent increase already in excise tax, that will not be sufficient to lift the moratorium,” she said.
DENR remains optimistic that once TRAIN 2 or the Tax Reform for Attracting Better and High-quality Opportunities (TRABAHO) Bill is passed, new mining projects will eventually be approved because that is the only condition on the lifting of the moratorium on the processing of mining agreements.
“I think we are seeing a positive outlook for the mining industry next year,” Teh said.
“The objective of the new tax package is not just to earn new revenues, but also to weed out those technically and financially incapable,” she added.
The EO calls for a moratorium on new mineral agreements until a bill rationalizing existing revenue sharing schemes and mechanisms take effect.
However, the DOF clarified that TRAIN only increased the excise taxes on mineral products, and did not fully incorporate a new fiscal regime for mining.
House Bill 8400 has already been approved by the House of Representatives on third and final reading. The bill was transmitted to the Senate last Nov. 13.
EO 79, issued by former president Benigno Aquino III, disallows the approval of new mineral agreements until legislation rationalizing existing revenue sharing schemes and mechanisms take effect.