Highland small-scale miners welcome new tax measure

March 2, 2020 Metro BLISTT

BAGUIO CITY- A number of small-scale miners (SSM) in the Cordillera region welcomed the recent action of the Bureau of Internal Revenue (BIR) to exempt from income and excise taxes the sale of gold to the Bangko Sentral ng Pilipinas (BSP) aims to strengthen the country’s gross international reserves.

The new tax measure is based on the Revenue Regulations No. 4-2020 -to encourage gold traders to sell the commodity again to the BSP and not to black market.

Following the new tax measure, local pocket miners appealed to the Department of Environment and Natural Resources (DENR) through the Mines and Geosciences Bureau (MGB) to soften its stand by lifting the stoppage order against the operations of small-scale mining in the region.

To date, operations of small-scale mining in the region remain closed. Under the new guidelines, income derived from the sale of gold are excluded in the gross income and shall be exempt from income tax, and consequently from withholding taxes.

Under Section 3 (Tax Exemption) of the tax measure, provides a) Income derived from the following sale of gold are excluded in the gross income and shall be exempt from income tax, and consequently from withholding taxes: 1) The sale of gold to the BSP by registered SSMs and accredited traders; and 2) The sale of gold by registered SSMs to accredited traders for eventual sale to the BSP.

And b) Excise tax shall not be levied, assessed and collected on the following: l) the sale of gold to the BSP by registered SSMs and accredited traders; and 2) The sale of gold by registered SSMs to accredited traders for eventual sale to the BSP.
Based on the guidelines, if an excise tax was paid prior to the sale of gold to the BSP, the taxpayer may file a claim for refund or credit with the BIR.

To avail the tax-free privilege, a trader must secure a tax identification number (TIN) that shall serve as the basis for the income and excise tax exemption of his sale.

The new regulations define accredited traders as persons/or entities engaged in the business of buying and selling gold that have complied with BSP’s gold traders accreditation procedures.

On the other hand registered Small-Scale Miners (SSMs) – refer to Filipino citizens who have organized themselves as an individual miner or cooperative duly licensed by the MGB to engage in the extraction of minerals or ore-bearing materials from the ground under the terms of a small-scale mining contract.

In fact,BSP reported its gold purchases from small-scale miners in the Cordilleras dropped ‘significantly’ in span of three years (2017-2019).

BSP assistant governor Iluminada Sicat, reported last year that the decline was mainly to due the higher price being offered by ‘private traders’ as compared to BSP.

The continuing high price of gold which pocket miners want to take advantage saw the decrease of gold purchases indicating that gold outputs are allegedly diverted to the black market.

The BSP is mandated by law to purchase gold from local small scale miners. This is in accordance with Republic Act No. 7076 known as the People’s Small Scale Mining Act of 1991.

Primo Agatep/ABN