Philippine President Fidel Ramos recently signed a law reducing taxes on minerals, which he described as a rescue package that would attract foreign investors to his country’s ailing mining industry.
The law reduces excise taxes on chromite and gold, non-metallic minerals and quarry resources to 2% from a high of 5% for gold, and to 2% from the 5% now in effect for copper and other metallics, Agence France Presse reports. The excise tax for metallic minerals, except gold and chromite, would be raised on a staggered basis over the next six years.
Ramos said at the signing ceremony that while the Philippines was second only to South Africa in terms of gold resources and fourth in terms of copper, it now ranks only 13th in gold production and fourth in copper production. “Low metal prices in the international market, the high cost of production inputs and heavy taxation have all caused the industry’s steady decline since the mid-1980s,” he said.
He added that “this timely rescue of the industry” would save nearly half a million jobs, ensure a fair return for existing and new investors, and open doors to more foreign investment. He stressed that the country is not attempting a short-term bailout of the industry, but, rather, is ensuring its viability. He said it takes at least six years before a mine can successfully start production.
Industry leaders had lobbied Congress for a longer period during which they could take advantage of lower taxes.
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