June 11th, 2025
House Ways and Means Chair Joey Sarte Salceda welcomed the ratification this afternoon of the bicameral conference committee report on the Enhanced Fiscal Regime for Large-Scale Metallic Mining. The measure is now set to reach the President’s desk for signature, marking the first time in three Congresses that the proposal has made it this far.
“This bill has been pending for the past three Congresses. Today, it finally makes it to the President’s desk. This is a milestone for fiscal reform,” Salceda said.
The measure creates a progressive and legally stable tax regime for large-scale metallic mining operations. It imposes a royalty of up to five percent of gross output for mines located inside mineral reservations, a margin-based royalty of one to five percent for mines located outside reservations, and a windfall profits tax of up to ten percent for highly profitable mining operations. Salceda, however, emphasized that the most transformative aspect of the bill is its tax administration and transparency provisions, not the tax rates themselves.
“The most meaningful part of this reform is not the tax rate. It is the state’s ability to finally see and value what is being taken from our soil. We can now audit sales. We can verify prices. We can track the trail from mine to ship,” Salceda said.
Under the new regime, the Bureau of Internal Revenue and the Bureau of Customs are mandated to jointly audit all sales and exportation of minerals. Both agencies are granted full access to marketing agreements, assay reports, and other relevant documents to ensure that reported mineral values reflect actual market transactions. Mining companies are required to file both quarterly and annual returns for royalty and windfall profit taxes, and all such taxes are expressly made non-creditable and non-refundable to prevent abuse or overclaims.
To ensure proper valuation of mineral products, the law mandates the establishment of dedicated laboratories, procurement of advanced assay tools, and the hiring of technical experts under the Bureau of Internal Revenue. The government will also be able to make use of metal pricing databases and other global benchmarks to assess whether declared prices reflect true arm’s length values. “We are lifting the veil on an industry that has always been underdeclared and underverified. If you fix the leakages, you do not need excessive tax rates. You just need truth in the numbers,” Salceda said.
He cited Mongolia’s success in significantly improving mining revenue collections through enhanced transfer pricing enforcement. In its first major transfer pricing case in 2019 and 2020, Mongolia recovered USD 228 million in back taxes and blocked USD 1.5 billion in loss claims from a multinational mining firm, amounting to about 1.7 percent of GDP, without increasing tax rates.
The bill also mandates ring fencing by treating each mining agreement as a separate taxable entity to prevent income shifting and tax base erosion. It enforces full transparency by requiring mining firms to disclose ownership structures and financial information, including documents previously covered by confidentiality rules under the National Internal Revenue Code and the Revised Corporation Code. The measure provides that forty percent of mining revenues be directly released to local government units without delay or holdback, and allocates ten percent of mineral reservation royalties to the Mines and Geosciences Bureau and the Metals Industry Research and Development Center to enhance mineral governance and support downstream industries.
“This completes the comprehensive tax reform program we began in the 17th Congress.” Salceda said.
“We now have not just better tax laws. We have better tax tools. We can now enforce our fiscal sovereignty over our mineral resources,” Salceda concluded.