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By Kenneth Christiane L. <\/b>Basilio, <\/b><\/span>Correspondent<\/i><\/p>\n SENATORS and representatives <\/span>have concurred to avoid prohibiting ore exports under a fresh fiscal framework <\/span>for large-scale miners aimed at increasing the government\u2019s share of mineral income.<\/p>\n A bicameral conference committee from the Senate and House of Representatives resolved conflicting sections of their legislation on Wednesday, following nearly ten years of legislative postponements.<\/p>\n At press time, the Senate had authorized the bicameral conference committee report, with only Senator Risa N. Hontiveros-Baraquel opposing it.<\/p>\n The House similarly ratified the report, which will now be forwarded to Malaca\u00f1ang for the President\u2019s endorsement.<\/p>\n \u201cThis legislation has lingered for the past three Congresses,\u201d Albay Rep. Jose Ma. Clemente S. Salceda, who chairs the House Ways and Means Committee, stated. \u201cToday, it finally reaches the President\u2019s desk.\u201d<\/p>\n The Philippines aims to refine its mining fiscal framework for large-scale miners to secure a greater portion of industry profits. Tax responsibilities for miners presently differ based on their agreements with the government.<\/span><\/p>\n The proposed legislation intends to impose a charge of 5% on large-scale miners operating within mineral reservations based on their gross output, and establishes a five-tier margin-based royalty system ranging from 1% to 5% for those operating outside, as per a copy of the reconciled version acquired by BusinessWorld.<\/i><\/p>\n A five-tier windfall profits tax system ranging from 1% to 10% was also incorporated into the bill.<\/p>\n \u201cThough a tax hike is unavoidable, we believe this progressive and adaptive strategy allows the government to gain more when global commodity prices surge, without imposing excessive strain on miners during market downturns,\u201d Michael T. Toledo, chairman of the Chamber of Mines of the Philippines, remarked in a Viber message.<\/span><\/p>\n The proposal also suggests the \u201cring-fencing\u201d of large-scale miners, categorizing miners as a distinct taxable entity based on each extraction agreement held with the government.<\/p>\n The Southeast Asian nation possesses an estimated $1 trillion in ore reserves and is among the globe\u2019s largest nickel suppliers to major metal consumers China and Japan, as limited smelting capabilities due to soaring power costs and infrastructure limitations keep the nation dependent on ore exports.<\/p>\n Approximately $7.37 billion worth of ores were exported in the previous year, according to the Environment department\u2019s Mines and Geosciences Bureau.<\/p>\n A copy of the reconciled version indicated the elimination of the Senate-proposed section concerning the ban on raw ore exports.<\/p>\n The Senate version proposed a five-year grace period prior to imposing a ban on unprocessed minerals to allow adequate time for miners to establish processing facilities in the country.<\/p>\n Mr. Salceda noted that there was no formal analysis on the implementation of the ore export ban. <\/span><\/p>\n \u201cYou can\u2019t simply assert that we\u2019ll implement a five-year delay for the establishment of domestic ore processing plants. What if it takes a decade?\u201d he remarked.<\/p>\n Mr. Toledo appreciated the lawmakers’ decision to remove the suggested ban on ore exports.<\/p>\n \u201cThis is a strategic advancement towards revitalizing the Philippine mining sector,\u201d he expressed.<\/p>\n The Philippine Nickel Industry Association stated that the decision was \u201ca wise and forward-thinking move that safeguards jobs, maintains investor confidence, and demonstrates a more realistic comprehension of the challenges surrounding domestic mineral processing.\u201d<\/p>\n Nonetheless, Mr. Salceda mentioned that the bicameral conference committee determined that the proposed ban on ore exports should be addressed by the subsequent Congress.<\/p>\n VALUE OF MINERALS Under the proposed legislation, the bureaus of Internal Revenue and Customs are tasked with auditing the sales and exportation of minerals, with extended authority to examine mining documents, including marketing paperwork and assay reports.<\/p>\n It also mandates the establishment of laboratories and acquisition of advanced mineral analysis instruments to assist in determining the quality of raw ores sourced from mines.<\/p>\n \u201cThe government will also have the ability to utilize metal pricing databases and other global benchmarks to evaluate whether declared prices accurately reflect true arm\u2019s length values,\u201d Mr. Salceda stated.<\/p>\n The measure aims to provide a \u201cfairer and more sustainable\u201d source of government revenue and would stimulate foreign investment in the sector, as per Mr. Toledo. The government could potentially earn up to P5 billion annually from this measure, according to Mr. Salceda.<\/p>\n
\n<\/b>\u201cThe most significant aspect of this reform is not the tax rate. It is the state\u2019s capacity to finally recognize and appreciate what is being extracted from our land,\u201d remarked Mr. Salceda.<\/p>\n