The Chamber of Mines of the Philippines (COMP) reiterated on Tuesday that the proposed revenue-sharing measure being pushed by the Mining Industry Coordinating Council (MICC) will render future legitimate mining projects uncompetitive.
Eventually, COMP which is composed of large-scale mining companies, said instead of increasing its share in mining profits, government revenues might be adversely affected by the proposed mining tax hike.
The MICC is pursuing a revenue-sharing measure imposing a 10 percent of gross revenues or 50 percent of the adjusted net mining revenue of mining companies, whichever is higher.
The move to impose higher taxes on mining came after the signing of Executive Order (EO) 79 on July 6, 2012, by President Aquino.
Under EO 79, the Aquino administration’s mining policy, no new mineral agreements shall be entered into until a law rationalizing existing revenue sharing scheme is enacted.
The MICC, which was created to formulate mining policies and programs, came up with the revenue-sharing measure proposal. A draft bill on the proposed mining revenue-sharing measure is set to be approved by Mr. Aquino.
More than a year ago, pursuant to EO 79, the Department of Environment and Natural Resources (DENR) through the Mines and Geosciences Bureau (MGB) issued Administrative Order 2013-10 dated February 21, 2013, increasing the fees for mining applications.
Mining companies through COMP have expressed alarm over the potential impact of a new revenue measure. According to COMP, mining companies operating in the country are already paying one of the highest tax rates in the world.
“The MICC proposal to impose more taxes will negatively impact one of the country’s strategic economic potentials rendering Philippine mining projects uncompetitive and killing an industry, COMP said.
Eventually, COMP said that 250,000 families with a multiplier factor that has benefited millions of Filipinos, will be affected.
Former Environment Secretary Elisea Gozun, Presidential adviser for Climate Change, said the metallic and nonmetallic mineral reserves of the country has an estimated value of P73.47 trillion or $1.63 trillion and has barely been tapped, COMP said.
“To safely and equitably harness this potential, the country needs to have a competitive and stable policy environment that will attract the right investors with the capacity to deploy the most efficient and environmentally safe technologies,” the statement added.
According to COMP, since the issuance of Executive Order 79 in July 2012, a moratorium on new mining projects has been put in place by the DENR, while the MICC looks into how it can increase government’s share in mining projects.
COMP said that nearly two years later, the mining industry is still in limbo.
“With mining investments down 40 percent from MGB’s projections for 2012, how then can higher taxes encourage more investments?” COMP said. –Jonathan L. Mayuga, Businessmirror
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