By Genalyn Kabiling
Small-scale miners who sell gold to the Bangko Sentral ng Pilipinas (BSP) will now enjoy tax incentives and other privileges under a new law signed recently by President Duterte.
Republic Act No. 11256, signed by the President last March 29, seeks to strengthen the country’s gross international reserves (GIR) by amending the National Internal Revenue Code.
Under the new law, registered small-scale miners will be exempted from paying income and excise taxes when they sell their gold to the BSP.
Prior to the enactment of the law, the Bureau of Internal Revenue (BIR) imposed a 5-percent withholding tax and a 2-percent excise tax on the sale of gold to the BSP.
“The following items shall not be included in gross income and shall be exempted from taxation under this title,” the law read. “(1) The sale of gold to the Bangko Sentral ng Pilipinas by registered small miners as defined under Republic Act No. 7076, and accredited traders; and (2) The sale of gold by registered small-miners to accredited traders for eventual sale to the Bangko Sentral ng Pilipinas,” it added.
The same law also stated that the gold sold to the BSP shall also be “exempt from payment of excise tax.”
“In addition to the foregoing, and notwithstanding the existing provisions of Republic Act No. 6938, as amended, and the applicable laws, the sale of gold by registered small-scale miners, as defined under Republic Act No. 7076, to accredited traders for eventual sale to the Bangko Sentral ng Pilipinas shall enjoy the same tax treatment and privileges given to the direct sale of gold to the Bangko Sentral ng Pilipinas under the Tax Code,” the law read.
RA 11256 has also directed the BSP governor, secretary of Environment and Natural Resources, secretary of Interior and Local Government and the commissioner of the BIR to recommend to the Secretary of Finance the rules and regulations necessary for the implementation of the Act.
The rules and regulations must include provisions for the registration and accreditation requirements of small-scale miners and traders in order to avail of the tax exemptions under the law.
The law takes effect 15 days after publication in the Official Gazette or in a newspaper.
Senator Juan Edgardo Angara, author, and sponsor of the bill, had earlier said the gold purchases of the BSP have declined due to the tax requirement imposed by the BIR.
The country’s GIR reportedly dropped to a seven-year low at $74.8 billion in October 2018 from $5.8 billion in the same month in 2017, according to Angara.