Miners warned: Clean up or be taxed to death

MANILA, Philippines - President Duterte yesterday threatened to tax mining firms “to death” if they do not rehabilitate the areas damaged by their operations.

During his second State of the Nation Address (SONA), Duterte said the destructive impact of mining operations has deprived the poor of livelihood and food sources.

“You have to come up with a substitute. Either spend to restore the virginity of their source or I will tax you to death,” the President said. “I will raise the taxes, I will use the revenues to compensate for those who are suffering and in agony.”

Duterte cited the effects of mining in Diwalwal in Compostela Valley.

“You want to see horror in your lifetime? Let’s go to Diwalwal, and I will show you the river. Up there at the source, it’s so pristine. But right at the start of the boundary where the millings are… the water there is not clear. It is not brown, it is black,” he said.

“If everything is perfect then you have every right to mine. But in doing so, you destroy the rivers, you destroy the streams, from which the poor people fish… and that is protein for the day for them.”

Duterte said former environment secretary Gina Lopez, whose appointment was rejected by the Commission on Appointments, had shown the impact of mining on rural communities.

He also saluted ABS-CBN anchor Ted Failon for producing a documentary on destructive mining.

“For once, they behaved correctly, ABS-CBN. Watch the documentary of Ted Failon. I salute him for coming up with it,” Duterte said.

Duterte has accused ABS-CBN of being biased against him and has threatened to block the renewal of its franchise.

The President stressed that he is not an enemy of mining companies but insisted on measures to help farmers and fishermen affected by their operations.

“Mining has caused the cracking of the soil so the farmers cannot eat anymore. They are reduced to the garbage of what you can get there, salvage anything and sell it to the scrap. That’s what is happening to the Filipinos,” he said.

“I am not your enemy. As a matter of fact, you give government almost P70 billion. But that’s very small.”

Miners blame illegal firms

The Chamber of Mines of the Philippines (COMP) said illegal miners who take up half of the country’s gold production should be taxed to death by President Duterte.

“We see the President’s point and his frustration as to why we are not getting a bigger share from mining. We can blame the illegal mines. They account for half but they do not actually pay,” COMP legal and policy head Ronald Recidoro told The STAR. “The way we see it and if we read between the lines, mining companies should give government its fair share, to give all affected stakeholders their fair share. And that has been our call and request ever since.”

Recidoro maintained that the President might not be distinguishing the legitimate miners from the illegitimate ones as the former are compliant with laws and regulations.

“Our problem is really the very poor enforcement of the law. A lot of of small-scale miners are not being taxed. The call should be to enforce the law,” he said.

“He is right to demand that mining operations be responsible. There is no place for irresponsible mining or irresponsible citizenship, individual or corporate, in the Philippines. He said he will tax if the industry doesn’t clean up. He should close down the irresponsible ones,” Nickel Asia Corp. corporate communications vice president JB Baylon said.

The chamber maintained that it will have to review whatever proposal there will be but emphasized that higher taxes should be imposed on illegal and illegitimate mining operations.

“If government wants a higher stake, we can explore that. But we should avoid the tax percentage that will kill the industry, particularly the legitimate ones,” Recidoro said.

“We will really have to study it. There are several kinds of mining in the industry. The tax regime is different per kind of mining process,” he added.

Listed Global Ferronickel Holdings Inc. president Dante Bravo noted that the industry is already heavily taxed, including 30 percent regular corporate income tax based on taxable income and five percent royalties on mineral reservation based on gross sales.

“We are paying other taxes like customs duties, value added tax and documentary stamp tax. We also remit withholding taxes on compensation, fringe benefits tax, expanded withholding taxes on purchases of goods and services, dividends tax on declaration of cash and property dividends, final tax on interest on loans, final tax on royalties on softwares used and other final taxes. Sum them all up, the current tax regime on the industry is already so heavy,” Bravo said.