DOF to push for mining revenue sharing scheme
MANILA, Philippines - The Department of Finance (DOF) will work on the passage of the fiscal incentives measure and the legislation of the mining revenue sharing scheme in 2013 after successfully pushing for the sin tax bill this year, officials said.
The Finance department wanted to have both the sin tax and the fiscal incentives measure approved this year but the uphill battle in Congress made it difficult to have the two bills approved this year.
Finance Assistant Secretary Ma. Teresa Habitan said the Fiscal Incentives bill is still pending at the committee level in the Senate.
“The FI bill is still at Committee level in the Senate. I don’t think it will be tabled again before the Christmas break,” Habitan said, adding that it is likely to be tackled in 2013 instead.
However, Habitan expressed hopes that the bill would be taken up before next year’s elections. “We would be back to square one if that happens,” she said.
The sin tax measure, on the other hand, is now being discussed by the bicameral conference committee, which is reconciling the versions approved by the House of Representatives and the Senate.
The House approved a measure that would yield P31.35 billion in the first year of implementation while the Senate’s version would yield P40 billion. The Bicameral Committee’s version would translate to P34 billion in additional funds in the first year of implementation.
Finance Undersecretary Jeremias Paul Jr. said in a separate interview on the sidelines of a recent Senate hearing said after the government pushes for the sin tax and the fiscal incentives measure, it would also work on legislating a mining revenue sharing scheme.
The Mining Industry Coordinating Council (MICC) earlier said it is already studying two options for a new revenue sharing arrangement between the government and mining industry.
The DOF said the basic goal of the MICC is to design a scheme, which adopts a single fiscal regime and a simple formula in determining the sharing arrangement that eliminates issues on valuation of outputs and costs of production.
The MICC is a joint committee of the Economic Development Cluster and the Climate Change Cluster under the chairmanship of Finance Secretary Cesar Purisima and Environment and Natural Resources Secretary Ramon Paje.
It is tasked through Executive Order 79 to draw up the new policy and draft legislation for mining.
Purisima has said earlier that he wants a revenue sharing scheme similar to the Malampaya Deep Water-to-Gas Project.
The Malampaya project is spearheaded by the Department of Energy and developed and operated by Shell Philippines Exploration B.V. (SPEX) with joint venture partners Chevron Malampaya LLC and the Philippine National Oil Co. Exploration Corp.
Under the service contract agreement, 70 percent of the gross proceeds from the sale of natural gas would go to the contractor to cover the investment cost.
The remaining 30 percent will be shared between the government and the consortium on a 60 to 40 basis, respectively. Once the contractor recovers` its investments, the 30-percent share would then increase, allowing the government to gain from these petroleum projects.
In 2011, the Malampaya consortium turned over $1.1 billion to the government.