DAVAO CITY (MindaNews/03 July) – From P800 million in February to P75 million in March or a 90% drop.
A huge chunk of gold output from small-scale mining operations in the Davao Region may have been sold to the black market instead of the Bangko Sentral ng Pilipinas (BSP), keeping away revenues from government coffers, authorities said.
Director Edilberto Arreza of the Davao Regional office of the Mines and Geo-Sciences Bureau, told reporters at the sidelines of the Forum on Responsible Mining Tuesday that Bureau of Internal Revenue (BIR) Commissioner Kim Henares bared the drop in gold sale during their meeting last month with the Davao Regional Enforcement and Coordinating Council on Mining Taxation and Proceeds.
He said Henares disclosed that gold sold to the BSP was at least P800 million in February this year but plunged to only P75 million the next month.
Arreza said the regional coordinating council has formed a task force to determine the existence of the black market and to persuade the miners “to sell back the gold to government or face the consequences, because we will run after them.”
Artemio Disini Jr., president of the Chamber of Mines of the Philippines, said the drop in gold sale to the BSP should raise concern “especially that small scale mines now constitute 70 percent of gold production in the country.”
Jesus Dureza, former Presidential Adviser for Mindanao, told reporters during a break at the mining forum held at the Grand Men Seng Hotel ascribed the estimated 90% drop in gold sale to the BSP to the recent move of the Bureau of Internal Revenue (BIR) to collect excise and withholding taxes on top of other taxes.
Dureza, who also served as chair of the Mindanao Economic Development Council and later the Mindanao Development Authority under the Arroyo administration, said government would easily collect 12 percent of the total gross value of the gold sold. “They were startled by the 12 percent. They have not been used to paying taxes,” he said of the small-scale miners.
Arreza noted that that the sudden drop in gold sales began during the implementation early this year of BIR Revenue Regulation 7-2008, which required imposition of two percent excise tax and five percent withholding tax on gold that the miners produced and sold to the BSP. The regulation was crafted in 2008.
The law requires small miners should sell gold to the BSP, which would be refined and included in the country’s Gross International Reserves.
“I think government should look closely into this situation,” Dureza said, referring to the plight of small scale miners and the need for government to acquire through sale, the gold from them.
Arreza said the number of small scale miners were still a subject of an inventory but he said their number would not be less than 50,000 spread in the Diwalwal gold rush in Monkayo, and Boringot complex in Pantukan, Compostela Valley province.
Dureza and Arreza were at the Forum on Responsible Mining organized by the JCI Senate Philippines and attended by a panel from the Chamber of Mines and representatives of various sectors, including leaders and representatives of the sector opposing large scale-mining. (MindaNews)