Big miners decry gov’t claims on taxes

Chamber of Mines of the Philippines president Philip Romualdez gestures as he speaks during a mining conference in Manila in 2011. On Friday, March 9, 2012, the chamber took exception to pronouncements of Cabinet members urging the expansion of a proposed 5-percent royalty to be levied on miners, on top of a proposed 50-50 revenue sharing scheme with the government. Romualdez claimed that the Philippine government is already getting the highest share from mining revenues among governments around the world. AFP PHOTO/JAY DIRECTO

Leaders of the country’s large mining firms on Friday decried government officials’ portrayal of the mining industry as having been remiss in sharing their profits and avoiding the payment of the correct taxes.

In particular, the Chamber of Mines of the Philippines took exception to pronouncements of Cabinet members urging the expansion of a proposed 5-percent royalty to be levied on miners, on top of a proposed 50-50 revenue sharing scheme with the government.

“The Philippine government is already getting the highest share from mining revenues among governments around the world,” said Philip Romualdez, who heads the umbrella organization of the country’s largest mining firms. “And now we’re hearing that it wants more.”

He stressed that a proposal to raise the government’s share of mining revenues has to be viewed in the context of the country’s overall competitiveness as a destination for mining investments vis-a-vis neighboring nations, which might offer more attractive conditions for foreign investors.

In a statement read at a media briefing in Makati City Friday, industry leaders pointed to official data from the Bureau of Internal Revenue and the Mines and Geosciences Bureau of the Department of Environment and Natural Resources showing that since 2007, total taxes collected from the mining industry every year averaged more than P10 billion.

In 2010, the mining industry’s total payments in terms of taxes, royalties, and fees reached nearly P14 billion.

“The government gets much more than just a 2-percent excise tax,” the industry statement said. “The actual fiscal contribution of a mining company is not just the excise tax, but all other taxes and fees paid by the contractor as well, (including) corporate income tax, customs duties on imports, value-added tax, capital gains tax, documentary stamp tax, and withholding tax on its income and other transactions.”

“Additional local business taxes and fees are paid directly to the local government units where the mine is located,” it added. “Mining companies operating in mineral reservations are also required to pay the government an additional royalty equivalent to 5 percent of the actual market value of the minerals produced, while those located in indigenous people’s areas have to pay an additional 1 to 1.5 percent of the gross value of the minerals produced to the [local inhabitants].”