New fiscal regime for large-scale mining set
An open-pit gold-copper mining area in Barangay Didipio, Kasibu in Nueva Vizcaya. The proposed rationalization of the country’s mining fiscal regime seeks to create a fair and equitable mining environment for all, the Marcos government said.—RICHARD BALONGLONG
MANILA, Philippines – The proposed measure seeking to simplify and rationalize the fiscal regime for large-scale mining is set to become law as it has been submitted for President Marcos’ signature.
A transmittal letter obtained by the Inquirer showed that the House of Representatives sent a copy of the consolidated version of House Bill No. 8937 and Senate Bill No. 2826 to President Marcos on July 31.
According to the Department of Finance, the reform measure delivers a long-overdue update to the outdated tax structure governing the mining sector.
It simplifies the fiscal system, guarantees the government’s fair share of revenues, strengthens environmental safeguards, and provides fiscal predictability and stability for investors—all while promoting responsible and sustainable mineral development, it said.
One of the key features of the consolidated bill is the introduction of a progressive royalty structure for large-scale mining contractors.
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A 5-percent royalty on gross output will be levied on operations within mineral reservations.
For those operating outside mineral reservations, the draft measure mandates a royalty of 1 percent to 5 percent on gross output, depending on the operating margin.
When the margin is zero or negative, a minimum royalty of 0.1 percent is imposed on gross output.
It also prescribed a windfall profits tax, which is applied to net income once the operating margin hits 30 percent. The rate starts at 1 percent and increases progressively, up to 10 percent if margins surpass 75 percent.
Furthermore, each mining project or agreement is treated as a separate taxable entity, preventing cross-project cost offsets.
The proposed bill also requires public disclosure of company-level financial, tax and environmental information.
