Dominguez open to proposal to slap a wealth tax on mining revenues

The head of the Duterte administration’s economic team is open to Albay Rep. Joey Salceda’s proposal to slap a sovereign wealth tax on mining revenues.

“The idea of a sovereign fund is actually a good idea…Funding something like this from taxes on irreplaceable resources, I think it’s a good idea,” Finance Secretary Carlos G. Dominguez III told reporters recently.

While the Department of Finance (DOF) has yet to see the details of Salceda’s proposal on paper, Dominguez said the DOF would support it.

Salceda, who chairs the committee of ways and means of the lower House, told reporters last month that he would propose new and higher taxes on mining operations, the proceeds of which would be placed in a sovereign wealth fund that the current administration couldn’t touch nor spend.

Among the features of Salceda’s proposal is jacking up mining excise taxes to 5 percent from 4 percent.

Another key feature of the mining fiscal regime that Salceda envisioned is 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 trust fund. The fund will come from a new 2-percent sovereign wealth tax, Salceda said.

Salceda said a sovereign wealth tax was ideal for nonrenewable resources like minerals and oil.