DMCI sees stability with improved fiscal regime law
The newly minted law that rationalizes the mining fiscal regime will provide long-term fiscal stability to sustain the operations of mining companies, according to DMCI Mining Corp.
The mining business of Consunji-led DMCI Holdings Inc. said it welcomes the signing of the Enhanced Fiscal Regime for the Mining Industry Act. The group expects the law to bring “lasting benefits” for host communities as well.
“We see the new fiscal framework as an opportunity to strengthen the mining sector’s role in generating long-term value for investors, communities, and the economy,” DMCI Mining said in a message to reporters on Tuesday.
“Furthermore, we welcome the fiscal stability it will bring to our operations,” the firm added.
Among the law’s key provisions are paying royalty of five percent of their gross output for mining companies operating within a mineral reservation. Meanwhile, mines operating outside reservations will be levied a margin-based royalty tax.
The law also imposes additional taxes when a company’s profit margin exceeds 30 percent. This is to ensure that the government receives its fair share while host communities benefit from their extra profit.
Additionally, the law outlined a ring-fencing provision. Each mining contractor is classified as a separate taxable entity to avoid the consolidation of income and expenses of all mining projects by a single taxpayer.
Through a mineral production sharing agreement with the government, a contractor is granted the exclusive right to explore, develop and use mineral resources within the contract area.
