Diokno seeks balanced mining tax for investment
At A Glance
- Finance Secretary Benjamin E. Diokno advocates reevaluating mining tax regulations for fair revenue capture and sustained investment in the sector.<br>Diokno highlights the mining industry's role in supplying essential minerals for low-carbon energy tech and the shift to a net-zero economy at the 2023 UN Climate Change Conference.<br>Diokno emphasizes the Philippines' position as a major nickel exporter and future copper producer, committing to implementing a new mining fiscal regime by early next year.<br>The bill to enhance the country's mining fiscal regime passed the House of Representatives on September 25 and is currently awaiting Senate approval.<br>The Department of Finance (DOF) strategically retains fuel taxes despite calls to suspend value-added tax (VAT) and excise taxes due to significant price increases in the second and third quarters of the year.
Finance Secretary Benjamin E. Diokno underscored the necessity of reevaluating mining tax regulations to fairly capture a proportionate share of revenues while also fostering continued investment in the sector.
At the 2023 United Nations Climate Change Conference, Diokno emphasized the mining sector's contribution to the supply of minerals essential for low-carbon energy technology and the advancement towards a net-zero economy.
“While the mining sector contributes to global emissions, the industry is also seen as critical in reducing the same as it is expected to supply the critical minerals needed for low carbon energy technology and the transition to a net-zero economy,” Diokno said.
“Now given that the Philippines is currently the largest exporter of nickel, and will become one of the largest producers of copper in the world, we are committed to implement the new mining fiscal regime by early next year,” he added.
The bill that will enhance the country’s mining fiscal regime was approved by the House of Representatives on a third reading lasr Sept. 25 and is now pending in the Senate.
The finance chief also said that the Department of Finance (DOF) exercised careful judgment in retaining fuel taxes amid calls to suspend value-added tax (VAT) and excise taxes on fuel due to the sharp price increase in the second and third quarters this year.
The DOF instead proposed to provide more subsidies to vulnerable sectors such as the agriculture and transport sectors, among others.
“These activities should not be seen as cost––they are investments. You save a lot by being proactive,” he said.
Diokno also emphasized the government’s building of a sustainable finance ecosystem to synergize public and private sector investments, such as the Sustainable Finance Taxonomy Guidelines (SFTG).
The framework also sets out how the Philippines intends to raise green, social, or sustainability bonds, loans, and other debt instruments in the international capital markets.
The SFTG serves as a tool to determine whether an economic activity is environmentally or socially sustainable, which directs private sector investments towards climate change adaptation and mitigation (CCAM) initiatives.