Duterte told: Go after illegal miners instead of taxing industry 'to death'

MANILA, Philippines — While they are open to exploring the possibility of higher taxes, the country’s mining industry maintained that the government should go after and focus on the illegal ones who fail to give a fair share of revenues to the state.

 

The Chamber of Mines of the Philippines emphasized that it is the illegal miners, who take up half of the country’s gold production, that should be “taxed to death,” as put by President Rodrigo Duterte during his second State of the Nation Address.

 

READ: Rambling 2-hour SONA: Duterte skips key issues

 

Duterte warned mining companies that he would tax them "to death" unless they restore the communities of mining sites. 

 

“We see the president’s point and his frustration as to why we are not getting a bigger share from mining. We can blame the illegal mines. They account for half but they do not actually pay,” COMP Legal and Policy Ronald Recidoro told The STAR in a phone interview. 

 

“The way we see it and if we read between the lines, mining companies should give government its fair share, to give all affected stakeholders their fair share. And that has been our call and request ever since,” he added.

 

Recidoro maintained that the president may not be distinguishing the legitimate miners from the illegitimate ones as the former are heavily compliant with laws and regulations. 

 

“Our problem is really the very poor enforcement of the law. A lot of small-scale miners are not being taxed. The call should be to enforce the law,” he said. 

 

“He [Duterte] is right to demand that mining operations be responsible. There is no place for irresponsible mining or irresponsible citizenship, individual or corporate, in the Philippines. He said he will tax if the industry doesn’t clean up. He should close down the irresponsible ones,” Nickel Asia Corp. Corporate Communications Vice President JB Baylon said. 

 

Furthermore, the chamber maintained that it will have to review whatever proposal there will be but emphasized that higher taxes should be imposed on those illegal and illegitimate mining operations. 

 

“If government wants a higher stake, we can explore that. But we should avoid the tax percentage that will kill the industry particularly the legitimate ones,” Recidoro said. 

 

“We will really have to study it. There are several kinds of mining in the industry. The tax regime is different per kind of mining process,” he added.

Listed Global Ferronickel Holdings Inc. President Dante Bravo noted that the industry already heavily taxed including 30 percent regular corporate income tax based on taxable income, 5 percent royalties on mineral reservation based on gross sales, among others.

 

“We are paying other taxes like customs duties, value added tax and documentary stamp tax. We also remit withholding taxes on compensation, fringe benefits tax, expanded withholding taxes on purchases of goods and services, dividends tax on declaration of cash and property dividends, final tax on interest on loans, final tax on royalties on softwares used, and other final taxes. Sum them all up, the current tax regime on the industry is already so heavy,” Bravo told The STAR.

 

He emphasized that the Board of Investments has long stopped granting income tax holidays on mining projects. 

 

The Department of Finance has yet to settle a firm proposal to a new taxation system for the industry. 

 

“We want the proposal of the DOF to begin discussion and consultation with the stakeholders,” Recidoro said.

 

Baylon, meanwhile, said the president’s recent remarks on the industry will serve as a challenge to maintain their operations to the highest standards.

 

“We need to be able to encourage responsible operations while cracking down illegal and irresponsible ones,” Baylon said. 

 

“We really think the president is referring to the illegal ones. If we are given the opportunity, we can show the President that legit mines give a fair share in taxes and we do rehabilitation works,” Recidoro added.