TAGUM CITY—Officials and miners in Compostela Valley are supporting calls to reduce the tax rate on gold, saying the levy has hit small-scale miners hard.
The 7-percent gold tax is too much to bear for small-scale miners and small gold traders, whose earnings are further lowered by taxes and fees collected by local government units, said Franco Tito, former barangay (village) captain of gold-rich Mount Diwalwal in Monkayo town.
“It’s too much. We pay the barangay and the local government unit. Then there’s the tax,” said Tito, a small-scale miner himself.
Tito said that the proposal to reduce or suspend the tax on gold was timely and that any tax change regarding the sale of the metal should be known to the mining sector before implementation.
Gold buyers in Diwalwal typically earn P20 to P50 as markup for every gram of gold they acquire from miners. At the current price of P2,200 per gram, 7 percent of it, or P154, is accounted for by the 5-percent withholding and 2-percent excise taxes, said trader Rodrigo Enriquez.
Compostela Valley Gov. Arturo Uy said he had received numerous complaints from gold traders when the 5-2 tax scheme was implemented two years ago.
“I told them to write a letter (to the Bangko Sentral ng Pilipinas) and until now I don’t know if it was acted upon,” Governor Uy said.
Four lawmakers have urged the Bureau of Internal Revenue to suspend the tax on gold, saying it has drastically reduced the volume of the metal sold to the central bank.
The governor, who used to engage in gold trading before he entered politics, acknowledged that the taxes imposed on gold had driven traders away from the central bank and pushed them to sell in the black market. By law, small miners must sell their gold to the Bangko Sentral.
“Traders earn just 1 percent. Actually, (gold buying) is not a good business but due to its being a fast commodity those engaged in the business profit by selling in large volumes,” Uy said.
The governor said he was against the scrapping of the tax and was amenable to lowering the tax rate. “The government also needs to collect taxes,” Uy said.
He said he was told that the price at which the central bank was buying gold did not differ much from that offered in the black market.
Attempts by the government to clamp down on the black market “could be very hard and almost impossible” because it is difficult to locate illegal gold markets, Uy said. Frinston L. Lim, Inquirer Mindanao