APEC 2015 APEC 2015 APEC 2015

BIR stands firm on decision to collect gold taxes

Pay taxes like everyone else, small miners told


01:48 AM November 16th, 2012

By: Michelle V. Remo, November 16th, 2012 01:48 AM

The Bureau of Internal Revenue stands firm on its decision to collect taxes on gold sales despite growing opposition.

According to Revenue Commissioner Kim Henares, the argument that the tax on gold sales has been pushing small-scale miners to sell gold to buyers outside the country is not a sufficient reason for the government to stop collecting taxes.

What is needed, Henares said, is strict enforcement of the law so that small-scale miners will stop turning to smugglers who bring the gold out of the country.

The law requires small-scale miners to sell all the gold they dig out to the Bangko Sentral ng Pilipinas (BSP). The miners are subject to a 2-percent excise tax and 5-percent creditable withholding tax on gold sales.

The central bank, in turn, keeps the gold as part of the country’s total reserves of foreign exchange.

But gold sales to the BSP have been declining, reportedly since the BIR started to strictly collect the taxes. In particular, the BIR has set up desks at the gold-buying sites of the BSP to ensure that taxes are collected in every transaction.

The strict collection of taxes has prompted some small-scale miners to sell gold to certain buyers who then take the precious metal out of the country.

Given the substantial drop in gold sales to the BSP, some legislators have called on the BIR to temporarily stop the collection of the excise tax and creditable withholding tax on gold sales until the government comes up with a solution.

But Henares said it would be more simple to enforce the law against smuggling.

“Small-scale miners should sell gold to the BSP because it is what the law states. If they don’t do so, then they commit a violation. What should be done about the issue is for law enforcement to be stricter,” Henares told reporters Thursday.

She suggested that the Bureau of Customs require gold exporters, particularly small-scale ones, to show documentary proof that the gold they are trying to bring out of the country was bought from the BSP.

The BOC must then stop any shipment of gold that has no certification from the BSP and hold the exporters for questioning, Henares said.

On complaints that the BSP only has a few gold-buying sites—in Baguio City, Quezon City, Naga City, Davao City, and Zamboanga City—Henares said the central bank should accredit entities to buy gold on its behalf.

Henares said stopping the collection of taxes on gold sales defeats the government’s purpose to regulate mining.

“Mining is being allowed, even if it is harmful to the environment, because of the revenue that the government may generate from it. Otherwise, why would we allow mining if the state will not earn anything from it,” Henares said.

She also said that it is the obligation of small-scale miners to pay taxes just like everyone else.

“Many of them earn much more than salaried individuals who pay taxes to the government,” Henares said.

Disclaimer: Comments do not represent the views of We reserve the right to exclude comments which are inconsistent with our editorial standards. FULL DISCLAIMER

For feedback, complaints, or inquiries, contact us.
Pink Imelda diamond found
Pink Imelda diamond found
November 25th, 2015
Am I campaigning for Duterte?
Am I campaigning for Duterte?
November 24th, 2015