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House committee approves fiscal regime bill for mining

house committee approves fiscal regime bill for mining - House committee approves fiscal regime bill for mining

THE House Committee on Appropriations approved Wednesday an unnumbered substitute bill seeking to establish a fiscal regime for the mining industry.

The bill, which consolidates House Bills (HB) 288, 560, 1687, 2557, 4541, 4874, 5022, and 5253, had cleared the House Committee on Ways and Means on Nov. 19.

The bill calls for large-scale metals miners to pay a royalty equivalent to 3% of their total gross output. It exempts small-scale miners from such royalties.

Currently, the law imposes a royalty scheme only in mining areas declared as mineral reservations.

The bill also proposes to create a National Resource Trust Fund which collects revenues from mining operations and “extends their benefits to next generations” through educational programs, technological and research programs, health services and disaster risk reduction management initiatives.

The fund will be created from the annual payment of mining contractors to the Bureau of Internal Revenue of an additional 2% based on gross output for large-scale metals miners.

The bill proposes that failure to comply with such obligations will warrant “immediate suspension or closure of the mining activities” of the mining concession holder.

The measure also proposes an auction system for concessions, which will be established by the Mines and Geosciences Bureau (MGB).

“This will minimize awarding of mineral agreements based on asymmetrical information, first-come first-served systems, and patronage politics. Moreover, it shall promote investments in mineral-rich areas through an online portal open to the public” Albay Rep. Jose Maria Clemente S. Salceda said in his explanatory note to HB 5022.

By requiring full public disclosure in the mining industry, the measure also institutionalizes the Philippines’ participation in the Extractive Industries Transparency Initiative (EITI), an international disclosure system under which participants declare the taxes and revenue generated by such industries. — Genshen L. Espedido

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