What is a mining fiscal regime?
It is a set of policy tools-such as royalties and taxes – formulated by the government for it to have a share of the economic value generated from mining activities.
It determines how revenue from mining projects is shared by the government, citizens, and mining companies.
The government is responsible for ensuring that the revenue generated from the mining of nonrenewable resources is used for economic development.
The Philippine mining industry plays a vital role in the country’s economic development, and having a clearly defined set of policy tools is imperative for the proper management of the country’s mineral resources.
The current mining fiscal regime is complex, resulting in investor uncertainty.
Therefore, the Department of Finance (DOF) proposes to rationalize the Philippines’ mining fiscal regime by simplifying the tax system, allowing the government to collect its fair share of mining revenues, and establishing good governance in the sector.
This will not only improve tax compliance but also enhance the ease of doing business, which will encourage more revenue- and job-generating investments to enter the country.
The reform is expected to generate PHP 47 billion in incremental revenues from 2024 to 2028.
Why do we need to rationalize or restructure the Philippines’ mining fiscal regime?
1. To increase the Philippines’ competitiveness with other countries and make the industry more attractive to investors by
simplifying the tax system.
2. To allow the government to collect its fair share of mining revenues when prices of metallic minerals are significantly high.
3. To establish good governance and ensure that transparency and accountability is upheld throughout the extractives value chain.
Salient Features of the Proposed Fiscal Regime
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