NEWS

By RG Cruz | ABS-CBN News | September 17, 2024 7:46PM

MANILA — Senate has begun plenary deliberations on Senate Bill 2826 or the “Enhanced Fiscal Regime for Large-Scale Metallic Mining Act” which is one of the priority measures identified in the Legislative-Executive Development Advisory Council in the 19th Congress.

Senator JV Ejercito sponsored the bill during the plenary session on Tuesday for the Committee on Ways and Means.

Ejercito explained that the bill serves as a “critical building block” in realizing the objectives of the Philippine Development Plan.

“This measure seeks to foster an enabling policy environment especially with an eye towards being more competitive with our regional competitors, by correcting the current mining tax regime that is fraught with complications. This shall enable the state to harness the full potential of our national mineral resources by reforming how the government derives its revenue share from the development and utilization of its resources,” Ejercito said in a speech.

He said the bill proposes a modernized tax regime specifically for large-scale mining activities—those involving exploration, feasibility, development, utilization, and processing, under a mineral agreement or financial or technical assistance agreement, as defined in Republic Act No. 7942 or the Philippine Mining Act of 1995.

Ejercito added that the bill also empowers the government to levy more revenues and royalties on all mining operations, whether inside or outside mineral reservations.

“Furthermore, the measure introduces a windfall profits tax based on simplified 5-tier rates ranging from 1% to 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. This will also streamline compliance and administration for both industry and government, while minimizing opportunities for aggressive accounting practices,” he said.

Ejercito also said that the bill seeks to strengthen safeguards against tax minimization.

“It limits the prospect of thin capitalization by setting a cap on how much companies can rely on debt financing to reduce their taxes through deductible interest expenses. Additionally, this bill also seeks to protect against ring-fencing by treating each mining operation of a company with multiple projects as a separate taxable entity, preventing them from offsetting profits from one project with losses from another to lower their overall tax bill,” Ejercito added.

The bill also has has mechanisms to ensure the speedy and timely release of the share of local government units in the taxes collected from mining and other fees while guaranteeing public disclosure and scrutiny of the use of mineral resources.

“Should these reforms come to fruition, the DOF estimates that the proposal will garner an average of Php 6.26 billion annual additional income for our nation’s coffers,” Ejercito said.

Source: ABS-CBN News

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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