ATM Statement on the passage of a new mining tax bill at Senate

ATM Statement

January 29, 2019

Senate of the Philippines

The Alyansa Tigil Mina (ATM) is an alliance of more than a hundred people’s organizations, Non-Government Organizations (NGOs), national environmental groups, Church groups and academic institutions who have decided to collectively challenge the aggressive promotion of large-scale mining in the Philippines through policy and advocacy works.

Congress has gifted the mining industry with lower taxes and royalty payments, with the passage of HB 8400 (An Act Establishing the Fiscal Regime for the Mining Industry) last October 10, 2018. The House Committee on Ways and Means passed the bill sponsored by Rep. Estrellita Suansing, Chairperson of the committee. Reportedly, it will replace HBs 422 and 7994.

Key provisions of the measure include the imposition of a three-percent (3%) royalty tax on large-scale mining operations located within the mining reservation areas per Mining and Geosciences Bureau (MGB) recommendation. HB 8400 also imposes royalty tax on small scale mining operations and a margin-based royalty tax on large scale mining operations outside the mining reservations.

Based from the 2016 PH EITI report, it is projected that the government will gain an additional 1.8 billion revenue from the TRAIN Law’s increase. However, we also think that this is not enough, considering that the mining industry has profited so much already from the state’s resources but were not able to sufficiently contribute back to the society.

For the measly taxes and payments we get from mining, the government’s revenue from minerals will be reduced. But the environmental, health and social costs that the country bears is too much.

We welcome new taxes for mining operations with the intent that communities and the whole country can benefit from the revenues of extracting minerals. However, we support the proposition that new taxes must be based on gross revenue, and not only in margins of income of mining companies.

The already miserable state of losing out on mining revenues will be worsened with the passage of this bill, as TRAIN 2 (TRABAHO) will lower corporate income taxes, including those of mining companies. The new excise tax rates approved under the TRAIN law is not sufficient to address the demand of EO 79, which is that a new fiscal regime on mining must be passed.

For ATM, a new fiscal regime on mining includes new rules on royalties, a tax on super profit or windfall profits, increased social development funds and increased rehabilitation and decommissioning funds. In support of SOS Yamang Bayan Network which lobby for the Alternative Minerals Management Bill (AMMB), we believe that the excise tax is the most strategic type of taxation the government shall explore in the taxation of mining industry.

The Mining Industry Coordinating Council (MICC) should not forget that other conditions remain in place that justify the moratorium. The MICC should first issue publicly the “no-go zones” map and decide with finality the closure and suspension orders issued by former DENR Sec. Gina Lopez.

In effect, this new substitute bill lowered the payments of large-scale mining operations in mineral reservations. It would have been more just if all large-scale mining operations were levied a 10% royalty payment requirement, based on gross revenues.

We support the provision that a ban on open-pit mining was introduced in the substitute bill. But we don’t believe that Congress will eventually pass that specific provision. At most, we can expect that at the final stages of passing this bill, that provision that bans open-pit mining will be scrapped by a bicameral committee.

Everyone must remember that this is the same Congress that rejected Ms. Gina Lopez on her confirmation as DENR secretary, presumably because of her strong stand against destructive large-scale mining.

We reiterate our call to Pres. Rodrigo Duterte that he can and he should, immediately issue an Executive Order that puts a ban on open-pit mining.

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For more information:

Caryl Pillora

ATM Policy Research and Advocacy Officer

policyresearchadvocacy@alyansatigilmina.net

(0926) 007 8294

Jaybee Garganera

ATM National Coordinator

nc@alyansatigilmina.net

(0917) 549 8218