DENR sees better year for mining in 2019

By: Karl R. Ocampo - 05:30 AM December 26, 2018

https://business.inquirer.net/262749/denr-sees-better-year-for-mining-in-2019

The Department of Environment and Natural Resources is positive that the mining industry will have a better year next year as the moratorium on the issuance of new mining permits is expected to be lifted once the second package of the new tax reform is passed into law.

Environment Undersecretary Analiza Teh told the Inquirer that the passage of the Tax Reform for Attracting Better and High-quality Opportunities (Trabaho) bill, which will craft a new fiscal regime for the mining industry, would benefit both the government and the private sector since it would be the basis to lift the suspension on new mining operations.

 “I think we are seeing a positive outlook for the mining industry. I think that the sooner the moratorium will be lifted, about 15 projects are in line to be issued mining permits, depending on our review,” she said.

“There are two views. If you ask the private sector, we already have the highest tax package among mineral-producing countries. If you ask the government, the objective is not just to earn new revenues but also to weed out those who are technically and financially incapable to go into mining,” she added.

Under the Tax Reform for Acceleration and Inclusion (TRAIN) law, excise taxes imposed on mining firms were doubled to 4 percent from 2 percent, while the second package of the new tax reforms dubbed as the Trabaho bill is set to impose a profit-based royalty between 1 to 5 percent on all mining operations.

But for Chamber of Mines of the Philippines vice president for communications Rocky Dimaculangan, the doubling of mining excise taxes “has by itself satisfied the provision” included in the executive order suspending the issuance of new mining permits. The chamber represents some of the biggest mines in the country.

However, he added that “given the pressure for further tax increases, we believe that a structure based on a profit-based royalty and a windfall profit tax as passed by the House Ways and Means Committee, with the rates thereon tied to operating margins, is the most equitable and progressive tax regime.”

The support from lawmakers to pass the Trabaho bill has been lackluster. Budget Secretary Benajmin Diokno said it was likely that it would be passed after the elections and not by yearend as originally expected.