House approves new mining tax scheme<\/strong><\/p>\n\n\n\n Congress approved on second reading the \u201cPhilippine Mining Fiscal Regime Act\u201d or House Bill No. 8937. Under the new tax regime, large-scale mining operations within mineral reservations will be subject to a royalty rate of 4% of gross output. <\/p>\n\n\n\n Large-scale mining operations outside of mineral reservations will be subject to margin-based royalties on net income. The royalty rates will range from 1% for miners with margins of 10% or less, and up to 5% for miners with margins above 70%. A windfall tax will also be introduced, which will impose additional taxes on income ranging from 1% for miners with margins between 35-40%, and up to 10% for miners with margins higher than 80%. Small-scale mining operations, on the other hand, would pay a royalty rate of 0.10% on gross output.<\/p>\n\n\n\n Safeguards in place<\/strong><\/p>\n\n\n\n Small-scale miners would be required to organize into cooperatives and register with their respective LGUs to obtain a People\u2019s Small-Scale Mining Contract. The bill also disallows consolidation of income and expenses for large-scale mining operations to prevent losses from unprofitable mining projects being deducted from profitable projects which would lower the overall profit margins. <\/p>\n\n\n\n To streamline the processing of mining applications and permits, the DENR has nembarked on digitalization efforts that will significantly cut down processing time from the current minimum of six months.<\/p>\n\n\n\n Measure receives broad support from mining industry<\/strong><\/p>\n\n\n\n Notably, the current version of the bill lowered the royalty rate inside mineral reservations to 4% from 5% in the previous versions. Royalties for operations outside mineral reservations will now be imposed on net profits rather than on gross output. Representatives of the Chamber of Mines of the Philippines expressed support for the tax regime, saying that the changes were in line with what industry members expressed to lawmakers during the consultation period.<\/p>\n\n\n\n