Extractive industries paid P35.26B in royalties, taxes
December 16, 2014 at 16:58
by David Cagahastian -
MINING and oil and gas companies contributed only a total of P35.26 billion in royalties and taxes to the national and local governments in 2012, according to the volunteer organization Extractive Industries Transparency Initiative (EITI) in the Philippines.
EITI Philippines released on Wednesday its first reconciliation report which compared the amount of royalties and taxes received by the government and the amounts on these particulars that were reported by participating mining and oil and gas companies. It was found that mining companies paid a total of P6.22 billion in revenues to the government, while oil and gas companies contributed P29.01 billion.
The figures amount to P35.26 billion, which represents the total reconciled “declared payments” made by the mining and oil and gas companies to the government which participated in the EITI project. This represents almost all of the payments made by these companies engaged in the mining and oil and gas industries since those that did not participate in the EITI project comprise only a negligible portion of these industries.
EITI Philippines Chief Proponent and Finance Assistant Secretary Maria Teresa Habitan said the government would like that corporations engaged in mining and oil and gas exploitation would pay more in royalties and taxes, but she said that the collection of revenues in these areas is limited to what the law allows to be collected.
“I would love that this would get bigger, but it’s limited to the current fiscal regime,” Habitan said. She said the Department of Finance is pushing for reforms in the fiscal regime to rationalize certain fiscal incentives, like income-tax holidays, that could have lowered the government’s revenue collection on these industries.
“This [fiscal regime] is being reviewed now in Congress because the laws should provide that the fiscal incentives should be open for review depending on the prevailing economic conditions since economic conditions can change over time,” she said.
Other causes on which the low collection could be attributed are the differences in the tax liabilities of various companies depending on the kind of concessions or franchise that the government has granted them.
Meanwhile, for the total revenues that the government realized from extractive industries, including items such as collections on taxes from materials imported by mining companies which may or may not be accounted for in the payments referred to above, the EITI project showed that the Department of Energy collected the biggest amount of P28.99 billion from the government’s share in the oil and gas concessions. This comprises 55 percent of the total revenues realized by the government from mining and oil and gas operations of private corporations engaged in the extractive industries.
Next comes the Bureau of Internal Revenue, which collected P21.36 billion in taxes of all kinds from the extractive industry, comprising of 40 percent of the total revenues realized. The Mines and Geosciences Bureau of the Department of Environment and Natural Resources collected P964 million from licenses in the use of extractive areas; the Bureau of Customs collected P725.21 million, mainly from materials imported by mining companies; the local government units collected P373.39 million; the National Commission on Indigenous Peoples collected P280.08 million from field-based investigation fees and royalties to indigenous peoples; and the Philippine Ports Authority collected P70.40 million in port fees, tariffs and levies.
This brings the total “revenue stream” of the government from extractive industries to about P52.77 billion, consisting of items such as corporate-income tax, excise taxes and withholding taxes which may or may not have been accounted for in the computation for the total declared payments of the mining and oil and gas companies which amounted to P35.26 billion.
Source: https://www.businessmirror.com.ph/extractive-industries-paid-p35-26b-in-royalties-taxes/
