REVENUE MEMORANDUM CIRCULAR (RMC) NO. 93-2026
I. PURPOSE
This circularizes the Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 12253, also known as the “Enhanced Fiscal Regime for Large-Scale Metallic Mining Act,” which is promulgated by the Department of Finance (DOF).
II. COVERAGE
The IRR shall apply to large-scale metallic mining operations in the Philippines. These refer to mining operations covered by any mineral agreement or Financial or Technical Assistance Agreement (FTAA) executed under the Philippine Mining Act of 1995 (RA No. 7942), involving the exploration, development, and utilization of metallic minerals.
Exception: Patented mining claims that are located and perfected under the Philippine Bill of 1902; segregated from the public domain and vested with private ownership; and expressly excluded from the coverage of any Mineral Agreement or FTAA are not subject to the taxes imposed under Section 151-A of the Tax Code, as amended by RA No. 12253.
III. MINING ROYALTY
| LARGE-SCALE MINING OPERATIONS | ROYALTY RATES |
| OPERATIONS WITHIN MINERAL RESERVATIONS | 5% of the gross output of the minerals or mineral products extracted or produced. |
| OPERATIONS OUTSIDE MINERAL RESERVATIONS | Margin Rate Over 0% but not over 15% 1%Over 15% but not over 30% 2%Over 30% but not over 45% 3%Over 45% but not over 60% 4%Over 60% 5% If margin is less than or equal to 0%, a minimum royalty of 1/10 of 1% of the gross output of the minerals or mineral products extracted shall be imposed. |
| FILING, PAYMENT, AND POSTING OF BOND | |
| FILING AND PAYMENT OF QUARTERLY RETURNS | Filing and payment deadline is within 60 days after the end of the calendar quarter when such products were removed, either electronically or manually filed with, and the tax paid to the Bureau of Internal Revenue (BIR) through any Revenue District Office (RDO), except as the Commissioner otherwise prescribes. |
| POSTING OF BOND FOR THE ROYALTY | The mining contractor or operator must file a bond approximating the total royalty due for the taxable year. The finality of the bond is on annual basis. Any outstanding annual royalty balance must be paid, while any excess payment may be carried forward as tax credits. |
| NON-REFUNDABILITY AND NON-CREDITABILITY | Not creditable or refundable even if the mineral products duly paid are actually exported. |
IV. WINDFALL PROFITS TAX (WPT)
The WPT is imposed when large-scale metallic mining operations earn exceptionally high profits due to favorable mineral prices or market conditions. The objective is to allow the government to receive a larger share when mining projects generate extraordinary returns.
| TAX RATES | |
| Margin | Rate |
| Equal to 30% but not over 40% | 1% |
| Over 40% but not over 55% | 3% |
| Over 55% but not over 65% | 5% |
| Over 65% but not over 75% | 7% |
| Over 75% | 10% |
For purposes of WPT, “Windfall” or “margin” shall be the ratio of net income to gross output. Optional Standard Deduction (OSD) shall not be used for purposes of WPT computation. Moreover, the WPT shall not be deductible from taxable income.
Its filing and payment deadline is due on or before the 15th day of April, or on or before the 15th day of the 4th month following the close of the fiscal year, as the case may be.
Both the Mining Royalty and the WPT may be filed either electronically or manually, and the corresponding taxes may be paid to the Bureau of Internal Revenue (BIR) through any Revenue District Office (RDO), unless otherwise prescribed by the Commissioner.
V. RING-FENCING
Ring-fencing restricts the ability of large-scale metallic mining operators and contractors to consolidate income and costs across different mining projects by isolating or segregating such income and expenses, such that it is restricted from offsetting losses or deductions from one project against income from another. For purposes of ring-fencing, a mining project refers to a distinct area covered by a single mineral agreement or FTAA, as defined and approved through a duly issued Declaration of Mining Project Feasibility (DMPF).
Separate Taxable Entities
• A metallic mining contractor, with respect to each mineral agreement or FTAA that it holds and/or operates
• Where there is more than one valid mining operator under the same mineral agreement or FTAA, each mining operator shall be deemed a separate taxable entity for its respective mining operations under each mineral agreement or FTAA.
These taxable entities shall entail registration with the BIR under a distinct branch Taxpayer Identification Number (TlN) extension but does not create a separate juridical person under Philippine corporation law.
Thus, each metallic mining contractor or operator of the foregoing entities shall also be responsible for compliance with the corresponding reportorial and other requirements under applicable laws, rules, and regulations.
VI. OTHER TAX-RELATED PROVISIONS
The Local Government Units (LGUs) shall receive a forty percent (40%) share of the gross collections of the national government from the preceding fiscal year from excise taxes on mineral products, royalties, and other taxes, fees, or charges, including related surcharges, interest, and fines, arising from the utilization and development of national wealth within their territorial jurisdiction. The Local Business Tax (LBT) rate imposed on mining contractors shall not exceed one-half of one percent (0.5%) of gross output. The DOF, through the Bureau of Local Government Finance (BLGF), may issue guidelines for its uniform implementation.