Ancestral Lands and Indigenous Cultural Communities

The Mining Act fully recognizes the rights of indigenous peoples and respects their ancestral lands. No mineral agreements, Financial or Technical Assistance Agreements and or any mining permits are granted in ancestral lands or domains except those with prior informed consent in areas with Certificate of Ancestral Domain Claims / Certificate of Ancestral Land Titles (CADC/CALT) and areas verified by the DENR Regional Offices or other appropriate offices as actually occupied by indigenous peoples under a claim of time immemorial possession.

When written consent is granted by the Indigenous Cultural Communities (ICC), through the National Commission on Indigenous Peoples (NCIP), a royalty payment shall be negotiated which shall not be less than 1% of the gross output from the mining operations.

The rights of indigenous peoples are protected and governed by Republic Act No. 8371 or better known as the Indigenous Peoples Rights Act of 1997.

7. Government Share From Minerals Development

Minerals development generate wealth for local and national governments. The following taxes and fees are the most common imposts collected from mining and mineral processing activities:

a. Direct payments to national government

• Corporate income tax - 32% of taxable income
• Excise tax on minerals - 2% of the gross output from minerals produced
• Customs duties and fees - 3%-7% for chemicals; 3%-10% for explosives; 3%-15% for mechanical and electrical equipment; 3%-10% for vehicles, aircraft and vessels.
• Value-added tax on imported equipment, goods and services - 10% of the value added
• Royalties on minerals from mineral reservations, if applicable - 5% of actual market value of minerals produced
• Documentary stamp tax - rate depends on the type of transaction
• Capital gains tax on traded stocks -5% to 10% of traded value
• Additional share of Government in the case of FTAA - rate depends on the scheme selected by the contractor
• Administrative fees (e.g. wharfage and port fees, licensing fees for radio, firearms and driving of motor vehicles and professional fees)
• Other national taxes, fees and charges

b. Direct payments to local government

• Local business tax - rate varies among local governments
• Real property tax - 2% of the fair market value of the property based on an assessment level set by the local government during a taxable year; mobile equipment are not subject to tax
• Special education levy - 1% of the same basis as a real property tax
• Registration fees - rate depends on the activity to be registered
• Occupation fees - 50 pesos per hectare per year for areas not covered by mineral reservations; 100 pesos per hectare for areas covered by mineral reservation.
• Community tax - charged to individuals and business establishments; maximum of 10,500 pesos per year per individual or establishment
• Other local taxes - rate and type depends on local government concerned

c. Direct payments to other Filipinos

• Royalty to landowners/claimowners - depends on the negotiation between landowner/claimowner and mining contractor
• Royalty to indigenous peoples, if within ancestral lands - minimum of 1% of the gross output from minerals

d. Indirect payments

• Fuel tax -1.63 pesos per liter of fuel
• Tariff of imported fuel - 0.36 pesos per liter of fuel
• Withholding tax on payroll - governed by the National Internal Revenue Code
• Withholding tax on royalties to claim owners - 20% of royalties
• Withholding tax on interest income from banks - 20% of the interest income
• Withholding tax on interest payment on foreign loans - 15% of interest payment
• Withholding tax on foreign stockholders dividends -15% of dividend
• Withholding tax on profit remittances to principal companies - 15% of amount of remittance
• Witholding tax on royalty for transfer of technology - 15% of the royalty
• Other withholding taxes

The rate of taxes and fees are guided by the National Internal Revenue Code, the Customs and Tariff Code of the Philippines, the Mining Act of 1995 and the specific tax code of local government units. Administrative fees and charges are governed by the government agency concerned.

In addition to the above, communities and local governments receive benefits from the social development and management programs (SDMP) of mining operations.