Gov’t urged to plug tax leaks, study sharing system

MANILA, Philippines—The Chamber of Mines of the Philippines (COMP) is challenging the government to first plug the tax leaks from small-scale miners before seeking higher share of mining revenue from large-scale miners.

“By plugging loopholes, they should collect taxes from small-scale miners,” said the group’s vice president for communication, Rocky G. Dimaculangan.

About 60 percent of the Philippines’ gold production comes from small-scale miners, according to the Mines and Geosciences Bureau.

Mining—particularly, gold mining—would benefit the state more if small-scale miners pay at least the 2 percent excise tax of the gross value of gold they sell to the Bangko Sentral ng Pilipinas, according to COMP.

The industry group said the government lost nearly P1 billion of revenue from gold in 2010 alone due to lack of regulation.

He also said the industry group was supporting calls for the direct remittance of the local governments’ share of mining revenue. This way, local governments, civil society groups and other stakeholders can better appreciate how mining contributes to local development.

At present, companies are required to pay excise tax to the national government. The amount goes to the national budget, which is distributed to LGUs in the form of revenue allocation after about four years. This, Dimaculangan said, was why LGUs could not see the value of mining. “Our proposal is to pay directly to the LGU,” he said.

COMP also recently reported that the local mining industry lost P10.4 billion worth of foreign direct investments (FDI), which investors placed overseas due to the moratorium on mining applications and uncertainties on the government’s pending mining policy.

The Department of Environment and Natural Resources remains closed to new mining applications while the government is still crafting an executive order on mining. As such, foreign investors opted to place their capital elsewhere instead of parking their money in the banks, COMP said.

Data from the Bangko Sentral ng Pilipinas indicated a mining FDI outflow of $240.43 million, or P10.4 billion, in 2011, which was a reversal of the $282.08 or P12.2 billion inflow in the previous year, COMP said.