The Chamber of Mines of the Philippines (COMP) warned that three flagship mining projects will be in jeopardy while a number of large-scale operations run the risk of closure, resulting in massive unemployment once the mining tax bill is passed into law.
The proposed mining tax bill was recently passed by the House ways and means committee.
In a statement, the miner’s group said the three flagship mining projects are expected to substantially contribute to economic development as their operations would result in substantial amount of exports and tax revenues and social expenses. The statement, however, did not identify these mining projects.
Aside from the three unnamed mining projects, the COMP said that a number of large-scale mining operations might just fold up, resulting in massive unemployment in their areas of operations.
“Simply put, the onerous tax bill will once again put into question the stability of our policies, which is most detrimental to attracting foreign investments in such a capital-intensive industry,” the COMP statement added.
In addition, the miners said “Foreign investors will simply look elsewhere; we are not the only country blessed with mineral resources.”
The group, however, said that if further tax increases are unavoidable, “the tax structure should not be onerous as to stop investments from coming in.”
A tax structure that is not “onerous” will sustain existing mines and encourage quality investments in the hugely untapped Philippine minerals sector, ultimately expanding considerably the tax base and providing far larger tax revenues to government.
The group cited the earlier pronouncements by the Marcos administration to make mining industry an important part in the economic recovery of the domestic economy.
In fact, they said that the lifting of the moratorium on new mining permits and the open pit ban in 2021 will indeed contribute to the revitalization of the industry and will encourage badly needed foreign investments.
But the proposed mining tax bill will once again set back the revitalization of the industry, contrary to pronouncements of the new administration to accelerate mining to support post-pandemic recovery efforts.
“We lament the fact that no consultations took place with the industry that would have allowed us to prove that the onerous provisions of the bill would make the Philippine mining industry one of the highest taxed in the world,” said the COMP statement.
Had they been consulted, COMP said they would have been able to prove that the “onerous” provisions would setback the Philippine mining industry again.
The miners stressed that the figures shown during the Committee hearing that purported to show the industry’s effective tax rate at 38 percent was “woefully out of date” as such report was done in the year 2000, prior to the doubling of the excise tax on mineral products under TRAIN 1.
Once again, COMP said, the mining industry is faced with a drastic policy change that will not be conducive to its growth, preventing it from playing a major role in the recovery of the domestic economy.
The group further urged Congress to revisit the bill and allow for full and meaningful consultations with stakeholders.
“This will give all affected parties an opportunity to contribute to the passage of a mining fiscal regime that will encourage investments and finally unlock the industry’s huge economic potential,” the statement concluded.