Philippine finance minister says government must get more revenue from mining – by Rosemarie Francisco and Erik dela Cruz (Reuters India – March 24, 2014)

http://in.reuters.com/

MANILA – (Reuters) – The Philippine finance minister said he will push mining companies to pay bigger shares of their revenue to the government even though the industry maintains that taxes are already too high and higher ones could kill the business.

Taxation of Philippine miners is a thorny issue that has delayed development of the country’s vast mineral resources. President Benigno Aquino, seeking to raise revenue from mining, has met stiff resistance.

Philippine Finance Secretary Cesar Purisima told the Reuters ASEAN Summit on Monday that the government should be getting one-half of gross revenue from mining. Last year, according to a government agency, direct state revenue from mining was worth only 2 percent of total output, though miners also pay corporate income tax of 32 percent and other fees to different agencies.

“Where I start is 50-50,” Purisima told the summit, held at the Reuters office in Manila. “The return of the government must be two-fold — as owner of the mineral, and two, as a taxing authority.”

Still, Purisima said it is the Philippine Congress that will decide the revenue-sharing formula, taking into account the industry’s position.

Within the next year, he said, the government is committed to getting tax legislation passed that features “a fair sharing where both the one who took risk, the mining company, and the one who owns the assets, are fairly rewarded.”

Current mining laws, including income tax holidays for start-up projects, have not created a win-win situation for the government and industry, Purisima said.

Government statistics show mining has been declining as a source of revenue. Taxes, fees and royalties from mining in the first nine months of last year came to 1.55 billion pesos ($34.2 million), only about 8 percent of the 18.8 billion pesos collected in all of 2012, according to the Mines and Geosciences Bureau (MGB).

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