Taxes and Fees on Mining

The government shares in the benefits from mining through taxes. Sixty percent of mining taxes go to the national government while, under the Local Government Code, local governments get a 40% share in the gross collection derived from mining taxes, royalties and such other taxes, fees or charges from mining operations. Further, occupational fees (P50.00/ha/yr) shall accrue fully to the LGUs.

Mining taxes as provided under Republic Act 7942 are classified into two major categories: national taxes and local taxes. The rates of these taxes are specified under the National Internal Revenue Code or P.D. No. 1158. In addition, there are administrative fees, charges and royalties being collected by the MGB and its Regional Offices.

Payments to National Government

• Corporate Income Tax - effective 2000, 32% of the taxable income
• Excise Tax on Mineral - 2% of the actual market value of the minerals produced
• Customs Duties - rates depend on the particular item purchased or shipped and the basis for the rates are those set by the Customs and Tariff Code of the Philippines
• Value Added Tax - 10% of the purchase value of goods and services except export-oriented projects
• Royalties on Minerals Extracted from Mineral Reservations Previously Explored by the Government - 5% of the market value of the gross output extracted or produced
• Withholding taxes on:
  • Payroll
  • Interest Income in Banks - 20% of interest
  • Royalties to Technology Transfer - 20% of royalties
  • Interest Payments to Foreign Loans - 15% of interest
  • Foreign Stockholders Dividends - 15% of dividend
  • Profit Remittance to Principal - 15% of profit remitted
  • Royalties to Landowners/Claim owners - 20% of Royalties

Payments to Local Government

• Business Tax – depends on the municipality/city; usually a small amount compared to excise tax on minerals which also depends on gross sales value
• Real Property Tax - an annual tax on permanent improvements and private lands which is commonly estimated at 2% of fair market value of property based on an assessment level plus 1% Special Education levy
• Registration and Permit Fees - depend on the rates set by the local government office
• Occupation Fees - 50 pesos per hectare
• Community Tax – depends on gross sales, maximum rate is PhP10,500.00