OPINION | Flexible mining taxes [By Ramon L. Clarete] READ
hree bills were filed at the House of Representatives at the First Regular Session of the 19Congress proposing to amend the mining taxes, among other purposes. Except for House Bill 373, which applies to both large- and small-scale mining, HB 2014 and HB 2246 cover only large-scale metallic mining operations.
HB 373 and HB 2014 propose royalty payment obligations of large-scale mining companies at 3% on gross output for those operating in mineral reservations, and graduated rates on the prot margin of companies outside mineral reservations. The graduated rates range from a percent to 5%, where prot margin is the ratio of income before corporate tax to gross revenues.
To pursue this point further, one may use the average effective tax rates to be the indicator describing the impact of thescal regime. Setting aside for now the proposed tax reforms introduced by the above bills, Table 1 shows the current tax regime. I note that the recent TRAIN law increased the excise tax rate from 2% to 4%.
A general observation is that the AETRs for copper in other countries are lower than in the Philippines. Countries with comparable AETRs as ours include the United States, Russia, Peru, and Canada. Those with relatively low AETRs include Mexico, Indonesia, Chile, South Africa, Australia, and Brazil.
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