New fiscal rules on mining seen to yield additional P6.3B
The Department of Finance (DOF) is eyeing an additional P6.3 billion in annual revenues from existing mining projects with the implementation of a new mining fiscal regime that aims to simplify mining taxes and tighten oversight of large-scale metallic mining.
In a statement, Finance Secretary Frederick Go said the revenue boost is expected following the issuance of the Implementing Rules and Regulations (IRR) of Republic Act No. 12253, or the Enhanced Fiscal Regime for Large-Scale Metallic Mining Act.
IRR provisions
“This is a critical step forward in unlocking the full economic potential of the mining sector while maintaining safeguards for transparency, accountability, and protection of the environment,” Go said.
Under the newly issued IRR, royalty rates for large-scale metallic mining operations are set at 5 percent for those located within mineral reservations, while projects outside mineral reservations are subject to a margin-based royalty on income, with rates ranging from 1 to 5 percent for margins of more than 0 percent up to 60 percent.
The IRR also imposes a windfall profits tax, with rates ranging from 1 to 10 percent for profit margins within 30 to 75 percent.
Margin or windfall refers to the ratio of net income from large-scale metallic mining operations to gross output.
The filing and payment of royalties on locally produced or extracted metallic minerals or mineral products, whether from inside or outside mineral reservations, shall be made within 60 days after the end of the calendar quarter.
Royalty tax returns may be filed either electronically or manually, with the Bureau of Internal Revenue designated as the primary collecting agency.
Meanwhile, the amount of the bond required for royalty filings should approximate the royalty due on mineral removals for the quarter, subject to final adjustment.
