The Mining Industry Coordinating Council (MICC) has agreed on a fixed government-private sector revenue share on gross and net profit that would guarantee government's equitable if not better share in mining revenues than the existing structure, Trade and Industry Secretary Gregory L. Domingo said.
Domingo, a member of the MICC, told reporters at the sidelines of the signing of the Memorandum of Agreement for the Enhanced Business Name Registration System yesterday that the MICC fixed agreed rate would still be submitted to the private sector for consultations and would be presented to Congress when it opens in June this year as part of the amendments of the Mining Act.
"We agreed last week on a structure and after that we will open for consultation with major players if they are amenable with it," Domingo said.
Without divulging the rates, Domingo said that MICC has agreed on a "certain percentage of gross and participation of the bottomline."
The percentage share of the government on the gross as well as the net income would be set at a fixed rate.
"The assumptions on the fixed rate agreed by MICC are based on industry figures," he stressed noting that the agreed structure would be "much simpler and equitable."
At present, the estimated government revenue take from the mining industry is between 10 to 20 percent only of gross revenues.
Domingo said that the estimate was P12 billion government tax take or less than 10 percent of P140 billion estimated total industry revenues.
He explained that the tax rate that the mining companies pay differs because some companies are under the Mineral Production Sharing Agreement, others are under Financial Technical Assistance Agreement while others are enjoying income tax holidays.
This time, mining companies are no longer entitled to income tax holidays under the proposed new mining law. Last year, the Board of Investments, which registers projects with ITH, also scrapped the incentives for mining projects even if the existing Mining Act still provides the tax perks for this industry. Domingo said the proposed amendments to the Mining Act provide a level playing field to all industry players. (BCM)