MGB seeks lifting of ban on mining permits issuance

The Mines and Geosciences Bureau (MGB) is set to ask the government’s interagency mining council to lift the suspension on the issuance of new mining permits following an increase in the taxes imposed on the industry.

Following the implementation of the Tax Reform for Acceleration and Inclusion (Train) law that doubled the excise tax on mining firms and the proposal to slap a 5-percent royalty on all mining operations, the industry has now fulfilled the condition of an executive order (EO) that imposed a moratorium on permits.

Under EO 79 issued by former President Benigno Aquino III, new mineral agreements can be entered into by the government once a “legislation rationalizing existing revenue sharing schemes and mechanism shall have taken effect.”

MGB, the mining arm of the Department of Environment and Natural Resources (DENR), can submit policy changes to the Mining Industry Coordinating Council (MICC) which will then decide whether or not the recommendation will be submitted to the President for approval.
MICC is composed of various agencies jointly headed by Finance Secretary Carlos Dominguez III and Environment Secretary Roy Cimatu.

In an interview, MGB assistant director Danilo Uykieng said that with the doubling of the excise tax to 4 percent and the proposal of a 5-percent royalty fee, the mining industry would be paying the government a total of 9 percent in taxes.

“This may be enough for us to consider the lifting of the moratorium but we still need to hold consultations. We have to discuss this with the DOF,” he said.

Mining groups have been calling for the suspension of the moratorium since the increase in their excise tax. The government’s plan to charge all mining companies with royalty, however, has not been well-received.

Chamber of Mines of the Philippines (COMP) chair and Nickel Asia Corp. president and CEO Gerard H. Brimo said the country stood to lose “quality investments” with the imposition of royalty, noting that this would put mining operations “too expensive.”