MANILA – Local business groups and joint foreign chambers expressed their opposition to the proposed reforms to on the Philippine Mining Act adding that it will make the sector more unattractive to foreign investors.
The proposed law will make the Philippines among the least attractive locations for mining investments, according to Julian H. Payne, president of the Canadian Chamber of Commerce of the Philippines.
He also added that the reforms sought by the Mining Industry Coordinating Council will heighten the average effective tax rate (AETR) for mining to up to 79 percent.
Currently, the AETR, covering all taxes and fees paid by a company throughout a mine’s lifetime is placed by the mining fiscal regime at about 60 percent.
The present figure is already higher than Canada and Australia with 58 percent , Peru with 50-55 percent and South Africa with 41 percent, according to Payne.
Payne also added that “mining companies will go where the proposed fiscal regime is a lot more attractive. Mining companies will not invest in the Philippines (under that regime).”
“The end result is that there will be less investment in mining, and less revenue for the government,” he said.
He also reiterated the importance of mining companies in generating jobs for the country.
“The argument that (minerals) are national resources and that a bigger share should go to the people than mining companies should (take account the fact) that these mining activities generate jobs and not just tax revenues. The total direct employment in 2012 was a quarter of a million, while the indirect jobs generated numbered 1.8 million in 2012, which was almost twice the size of the BPO industry. Thus, when we talk of share of national wealth going to the country, you just don’t talk about taxes. We should talk of employment,” he added.
Meanhwile, Ian Porter of the Australian-New Zealand Chamber of Commerce (Philippines) also said that they are hopeful that the government will take their views into consideration.
“We’re not optimistic but we’re here because we believe that the Philippines has to understand the benefits of responsible mining. In the short term, we hope the recommendations will be taken up. The Philippines cannot afford not to have responsible mining, as this is directly linked to addressing poverty and unemployment,” he said.