Salceda proposes sovereign wealth tax on mining
MANILA, Philippines — After leading the House of Representatives in passing two tax reform measures on corporate income taxation and sin taxes, Albay Rep. Joey Salceda will next propose new higher taxes on mining operations, the proceeds of which will be placed in a sovereign wealth fund that the current administration cannot spend.
Salceda, who chairs the House Committee on Ways and Means, told reporters last week that the panel would undertake consultations for his proposed new mining fiscal regime even though a bill had already approved under the leadership of then-Speaker Gloria Arroyo.
He noted that the swift passage of the Corporate Income Tax Incentives Reform Act (Citira) and the excise tax hikes on alcoholic drinks and e-cigarettes in the current 18th Congress was possible because these measures had already been passed by the preceding 17th Congress.
Among the features of Salceda’s proposal included jacking up mining excise taxes from 4% to 5%.
Another key feature of the mining fiscal regime that Salceda envisioned was the establishment of a sovereign wealth fund, which he said would have to be accumulated during a six-year period and parked with the Bureau of the Treasury as a trust fund.
The fund will come from a new 2% sovereign wealth tax, he said.
The provision that only the next administration could tap the sovereign wealth fund would minimize opposition from the executive, Salceda explained.
“That is actually the big idea behind it — it’s a self-limiting incentive system. It’s like: Why should I be interested in this if I can’t even use it?” he said, speaking partly in Filipino.
Salceda said a sovereign wealth tax would be ideal for nonrenewable resources like minerals and oil.
Another provision that Salceda will push for is an auction of mining contracts.
While the proceeds of these proposed additional taxes on all mineral output would go to the national government’s coffers, Salceda said he would want to put in place measures ensuring benefits to local communities that host mining operations.
According to Salceda, he has already started talks with the Chamber of Mines of the Philippines and its member-firms, the academe, and other industry stakeholders regarding his proposed bill.
Salceda said he was hopeful his mining tax proposal would be passed into law this year so that it would be implemented as early as next year.
/atm
