Enhanced Fiscal Regime for Large-Scale Metallic Mining

Country / jurisdiction: Philippines · Year: 2025 · Status: In force · Level: National · Type: Voluntary

Republic Act No. 12253, formerly Senate Bill No. 2826, was signed into law by the President of the Philippines to enhance the fiscal regime for the large-scale metallic mining industry. It amends sections of the National Internal Revenue Code of 1997 (RA 8424) and introduces new provisions to promote exploration, production, innovation and sustainable practices. The law affirms state ownership of all mineral resources and encourages private enterprise and investments through legal stability and fiscal incentives.

This law applies to all large-scale metallic mining operations in the Philippines, both within and outside mineral reservations.

Promoting Exploration, Production, and Innovation:

1. Tax Incentives: Introduces new tax incentives, including income tax holidays for new mining projects and reduced corporate income tax rates from 30% to 20%.

2. Financial Benefits: Provides exemptions from certain local taxes and royalty rate reductions for large-scale mining operations within mineral reservations, set at 5% of gross output. Additionally, margin-based royalties are applied to operations outside mineral reservations ranging from 1-5% depending on profit margins.

3. Policy Targets: Aims to increase mineral output, particularly nickel, gold and copper, and encourage technological advancements in mining operations.

Encouraging Sustainable and Responsible Practices:

1. Environmental and Community Expenses: Mining companies must cover expenses necessary to comply with environmental obligations and community development projects as stipulated in the mineral agreement or financial or technical assistance agreement and in the applicable implementing rules and regulations which are deductible from their taxable income.

2. Safety Protocols: Mandatory implementation of rigorous safety standards to protect workers and communities.

3. Transparency and Accountability: Institutionalisation of an inclusive and participatory mechanism for data collection, verification, public disclosure, and scrutiny of all extractive industry-related data.

4. Disclosure Requirements: Includes tax and non-tax data, beneficial ownership, natural capital accounting, and extractives value-chain revenues and expenditures.

5. Multi-Stakeholder Group (MSG): Establishment of a multi-stakeholder group (MSG) with relevant representatives from government, industry and civil society.

Additional Sections:

Windfall Profits Tax: Additional tax on net income from mining operations (1% to 10% based on income margins).

Ring-Fencing: Each mining contractor or operator is treated as a separate taxable entity per agreement.

Monitoring and Audit: Authorises audits of all mineral sales and exports.

Local Government Shares: Local governments receive 40% of gross collections from related charges.

Appropriations: Funds allocated for facilities and tools for mineral valuation.

Official source: https://www.officialgazette.gov.ph/2025/09/05/republic-act-no-12253/