Finance Secretary Carlos Dominguez III has described as a “good idea” a congressional proposal to impose an additional tax on mining, the proceeds of which will be placed in a sovereign wealth fund to benefit future generations of Filipinos.
Dominguez said the proposal, introduced by Albay Rep. Joey Salceda, follows the principle of “intergenerational equity,” which ensures fairness among generations in the use and conservation of natural resources.
In this case, the concept of intergenerational equity applies to the use and conservation of the country’s rich mineral resources.
“The idea of a sovereign fund is actually a good idea,” said Dominguez in a recent press briefing. “It answers the question (of how) you’re using a non-renewable resource and passing on the benefits to future generations.”
Salceda, who chairs the House committee on ways and means, said that aside from raising the current excise taxes on mining, he will be proposing a new 2-percent tax on gross output for large-scale metallic mining that will form part of a “Natural Resource Trust Fund (NRTF).
This sovereign wealth fund will be collected by the Bureau of Internal Revenue (BIR) and accumulated over a six-year period. The Bureau of the Treasury (BTr) will manage and create a Special Account for the NRTF.
Only the next administration can tap into the sovereign wealth fund, Salceda has said.
The Albay lawmaker’s plan forms part of his proposed new fiscal regime for the mining industry under House Bill (HB) No. 5022.
Dominguez said that while he has yet to study the details of Salceda’s proposal, the idea of setting up a sovereign wealth fund by taxing irreplaceable resources like mineral resources will be beneficial to all Filipinos.
He said the government already has a coco levy fund, which is similar to a sovereign wealth fund.
Salceda’s proposal, however, will ensure that proceeds from a new mining tax would be an “intergenerational” fund that will benefit the next generations.
For instance, a finite, natural resource like gold, when mined and sold, cannot benefit future generations, Dominguez said. “But imposing a tax on mining the gold to help set up a sovereign wealth fund that will be invested to benefit future generations will ensure that every Filipino gets his or her fair share from the use of country’s natural resources.”
Dominguez likewise welcomed Salceda’s proposal to include a provision stating that the current administration cannot touch the sovereign wealth fund.
More on TaxReform News
Firms to get superior incentives, extra deductions under proposed corporate tax reform bill →Date Posted: August 21, 2019
Department of Finance (DOF) officials have allayed concerns about incentive reform, emphasizing that qualified firms … Continue reading Firms to get superior incentives, extra deductions under proposed corporate tax reform bill
Clean Air Asia backs DOF tax reforms →Date Posted: May 31, 2017
An international nongovernment organization advocating clean air initiatives is backing the Department of Finance (DOF)-proposed reforms in excise taxes on fuel and vehicles as an effective measure to raise additional revenues while curbing air pollution by reducing the “wasteful consumption” of fossil fuels.
Gov’t to continue ‘barrage of reforms’ to boost growth →Date Posted: October 18, 2019
After unleashing a “barrage of reforms” in his first three years in office, President Duterte … Continue reading Gov’t to continue ‘barrage of reforms’ to boost growth
DOF to urge Congress to pass higher tobacco tax rates to further discourage smoking, raise more healthcare fundsDate Posted: April 29, 2019
The Department of Finance (DOF) will “try its best” until the last minute to convince the Congress to impose new “sin” tax rates on tobacco products that will make cigarettes pricey enough to further discourage smoking, especially among teenagers.