Mining revenue scheme finalized soon

MANILA, Philippines - The Mining Industry Coordinating Council (MICC) is in the final stages of crafting a draft bill for a new revenue-sharing scheme between the government and mining companies, said the Mines and Geosciences Bureau (MGB).

MGB Director Leo Jasareno said a recent interview that the MICC has reported two weeks ago to the Office of the President that the bill is nearly complete.

Subject to deliberation in the finalization of the bill are two new revenue sharing schemes: the imposition of a 10-percent tax on gross revenues; and the imposition of a 50-percent tax on adjusted mining revenues plus 10 percent of gross sales if metal prices increase by 25 percent annually.

The revenue-sharing scheme that would produce the most earnings for the government would be used.

Both schemes would be inclusive of income tax and royalties, said Jasareno.

Adjusted mining revenues, the MGB head said, pertains to the difference between gross sales and direct cost, which comprises the costs incurred in the actual production of ore (direct mining cost) and administrative expenses.

The administrative cost, Jasareno elaborated, would be capped at only 10 percent of the direct cost.

“The mining industry has already been consulted about this, but up to now they still have their own proposal,” Jasareno said.