Photo from the Office of the Speaker
The House of Representatives is not backing down from its plan to ban open-pit mining and revise the taxation of mineral products in the country despite strong opposition from the mining industry.
At a technical working group (TWG) meeting of the House committee on ways and means Thursday, Speaker Gloria Macapagal-Arroyo gave the Department of Finance (DOF) an ultimatum to submit its draft bill on the fiscal regime for the mining industry.
鈥淚 will ask the industry, talk to the DOF otherwise we make our own,鈥� she said.
鈥淭alk to the DOF and let the DOF come back with a new draft in three days鈥� time otherwise we do our own. Anyway, it鈥檚 not your priority; it鈥檚 only the President鈥檚 priority,鈥� she added.
Under the working draft bill of the panel, 鈥渕ining contractors for all metallic and non-metallic mining operations, whether large-scale or small-scale, shall pay the government a royalty equivalent to:
鈥� if within mineral reservations, 5 percent of the market value of the gross output of the mineral products extracted, exclusive of all other taxes;
鈥� if outside mineral reservations, 3 percent on the first three years of upon the effectivity of the Act, 4 percent on the fourth year and 5 percent on the fifth year.鈥�
At present, a royalty is imposed only on mine sites declared as mineral reservations.
搁贰础顿:听
Arroyo also proposed that open-pit mining be clearly defined and prohibited in the bill.
But Gerard Brimo, chair the Chamber of Mines of the Philippines, said the imposition of such royalties would 鈥渄ry up investments鈥� and eventually kill the industry.
鈥淭here are two things that can impact us: it will dry up investments, and I have no doubt that that will happen, and secondly and perhaps more alarming in the short term is that companies that are currently struggling because prices are low鈥� but if they get hit with such a big imposition it鈥檚 possible that they may close before their time,鈥� he said.
But Arroyo recounted how Filminera Resources Corp. Director Gloria Tan Climaco talked to her two days ago about Finance Secretary Carlos Dominguez III鈥檚 stand on the proposed measure.
Climaco, she said, told her that the establishment of the fiscal regime on mining is not a priority of Dominguez and that it was Arroyo鈥檚.
Arroyo was apparently irked by this, citing that it was President Rodrigo Duterte鈥檚 explicit directive to ban open-pit mining and tax the industry during his State of the Nation Address.
鈥淲hen Gloria Tan Climaco came to me two days ago, she said that the measure you are preparing is going to kill the industry. I said, 鈥榙o not tell me that, this is an administration measure. Tell it to the DOF.鈥� And she said, 鈥榖ut I told Sonny聽Domiguez,鈥� and listen to this DOF officials. She showed me the text, 鈥榯hat is not my priority. That is GMA鈥檚 priority鈥�,鈥� the former president said.
鈥淎nd I said, 鈥榚xcuse me. I鈥檓 the one who opened up the mining industry in 2004 and it is my priority to kill the industry?鈥欌�� she added.
If the DOF does not respond with their request to submit a counter-proposal until Tuesday, Arroyo said they would include in the bill provisions imposing royalty fees to mining firms even to those operating outside mineral reservations.
She added that open-pit mining would be clearly defined in the bill and would be prohibited.
鈥淚n other words, our bill will specifically, will explicitly prohibit open-pit mining as defined and give a grace period to be determined by the DENR during which they pay the tax that you say will kill the industry,鈥� Arroyo said.
鈥淥ur proposal is if it鈥檚 mineral reservation, if it鈥檚 FTAA (Financial or Technical Assistance Agreement), if it鈥檚 mining firm, they all pay a royalty, the same royalty, that鈥檚 my proposal unless I hear from the DOF,鈥� she also said.
DOF Assistant Secretary Ma. Teresa Habitan said they would comply to this.
The still unnumbered substitute bill to House Bill Nos. 422 and 7994 seek to establish a rationalized and single fiscal regime applicable to all mineral agreements and retaining the imposition of corporate income tax on the mining sector, among others.聽 /muf