Gov’t urged to review coal mining tax system

Manila Bulletin
by Melody M. Aguiba March 9, 2014 

The government should review the tax system for coal mining which has significant discrepancy from metallic mining, depriving government of big taxes arising from an old law granting favorable tax to coal miners. 
While coal and metallic mining both belong to the extractive industry, coal mining generates lesser tax revenue for the government due to Presidential Decree (PD) 972 or Coal Development Act of 1976. Anti-mining groups press for additional revenue share of government from mining, especially metallic mines. 
However, PD 972 protects coal operators from more tax spending at government’s expense, according to Cielo Magno, national coordinator of Bantay Kita (BK), a group supportive of the Extractive Industry Transparency Initiative (EITI). “We have stricter regulation on large scale (mostly metallic) mining compared to coal mining,” said Magno. 
“There’s a need to review the fiscal policy on coal.” The coal sector enjoys a special allowance of 30 percent from the gross income balance which metallic mines do not enjoy. Section 10 of PD 972 provides “Coal operating contracts …shall be granted a special allowance the amount of which shall not exceed thirty per cent of the balance of the gross income after deducting all operating expenses.” 
Aside from this, coal mining is expected to continue enjoying incentive of the Board of Investment’s Investment Priorities Plan granting new projects with income tax holiday. 
Government has announced removal of metallic mines from this income tax holiday incentive. 
 “Since the government is outsourcing coal extraction to the private sector, the government pays basic fees to them for extracting minerals,” said Magno. 
BK is also pushing for the Philippines’s official membership into the global EITI by December this year. 
This is after the country’s acceptance as candidate as EITI member as of May 2013. 
With the EITI membership, both the government and the private sector will be held more liable to the public for taxes. For private companies, their tax payments will be published as much as how government will be required to publish the amount of taxes they receive from companies. Government will also be required to publish how it uses these taxes. source