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Philippines: 12% tax to kill mining sector, says top exec
MANILA, Philippines — The group representing the country’s biggest miners warned lawmakers yesterday that the planned imposition of higher taxes would kill the mining industry.
“At present, we are paying a four percent excise tax. If you impose an additional five-percent royalty, plus local taxes, the total would be close to 12 percent. That will kill the industry,” Chamber of Mines of the Philippines (CMP) Gerard Brimo told the House Ways and Means Committee.
He said a 12-percent tax would be the highest in the world a country could levy on its mining sector.
“I have been in mining for 40 years, and I tell you, it will not work,” Brimo, who is president and chief executive officer of Nickel Asia Corp., said.
The Ways and Means Committee is considering a bill that would impose higher taxes on miners.
The CMP has submitted to the committee a package of counter-proposals. It has also presented such package to the Department of Finance (DOF), which has rejected it and is sticking to higher taxes.
“We are for retaining the current four percent excise tax, plus a royalty tax and a windfall profit tax that would replace the proposed government share. Basically, that is the structure we are looking at,” Brimo said.
He said their counter-proposals “are higher than what Chile, Peru, South Africa, Canada and other countries are charging their mining industries.”
“They are reasonable and doable, and we can prove it,” he said.
He urged the committee to give the mining sector the opportunity to present and justify its proposals.
Rep. Johnny Pimentel of the mining province of Surigao del Sur supported Brimo’s appeal.
“Let us come up with a matrix of our version of the mining taxes bill, the DOF version and the mining sector’s version. Let us compare the proposed rates and agree on a compromise,” he said.
He said the House should consider the possibility that “imposing too much taxes could kill the industry.”
“We have a thriving industry that is contributing billions to the national coffers and employing thousands of workers. If it collapses, we will lose billions and thousands will be added to the ranks of the unemployed,” he said.
The committee chaired by Nueva Ecija Rep. Estrelita Suansing decided to convene one last technical working group meeting on Monday to craft a final version of the mining taxes bill.
President Duterte has repeatedly attacked the mining industry, accusing it of destroying the environment. He said the country could afford to shut down its mining sector.
Source: https://www.philstar.com/business/2018/09/27/1854933/12-tax-kill-mining-sector-says-top-exec#tZezfFCtL3VHZFS4.99