04/09/2025
*Public Weather Forecast issued at 5 AM | September 04, 2025 - Thursday
*President Ferdinand R. Marcos Jr. signs Republic Act (R.A.) No. 12253 or the ‘Enhanced Fiscal Regime for Large-Scale Metallic Mining Act’ in a ceremony at the Kalayaan Hall in Malacañan Palace on September 4, 2025.
This Law consolidates the provisions of House Bill No. 8937 and Senate Bill No. 2826. It seeks to simplify and rationalize the fiscal regime for large-scale metallic mining, ensuring an equitable share of mining revenues for the government while upholding the principles of transparency, accountability and good governance in the mining industry.
Key salient features of this Law include:
● Imposing a 5-tier, margin-based royalty at rates ranging from 1% to 5% on income from metallic mining operations outside mineral reservations, and a minimum royalty rate of 0.1% on gross output for mines below the margin threshold;
● Introducing a 5-tier, margin-based windfall profits tax at rates ranging from 1% to 10% on income from metallic mining operations;
● Implementing a 2:1 debt-to-equity ratio or a thin capitalization rule applicable to related-party debt, to limit the amount of tax-deductible borrowing costs arising from the debt;
● Adopting a ring-fencing rule on a per-project basis to prevent the consolidation of mining project income and expenses by the same taxpayer, thereby preventing companies from offsetting losses from more profitable mining projects;
● Clarifying that the applicable local business tax rate on mining contractors is 0.5%; and
● Retaining the imposition of: (i) the 5% royalty for mines inside mineral reservations; (ii) 25% corporate income tax (CIT); (iii) 4% excise tax; (iv) 1% (minimum) indigenous people royalty; (v) applicable withholding taxes, among others.
Furthermore, the enhanced mining fiscal regime aims to improve governance by introducing transparency and accountability measures, such as the monitoring and auditing of mineral sales and exports, the public disclosure of mining data, and the establishment of a multi-stakeholder accountability group.
It seeks to reduce revenue leakages, maximize collections, and strengthen sector governance while protecting the environment and communities through natural capital accounting data under the Philippine Ecosystem and Natural Capital Accounting System (PENCAS).
The regime will also streamline the disbursement of local government unit (LGU) shares from mining taxes to address delays. Additionally, 10% of mining royalty from inside mineral reservations will be earmarked for exploration by the Mines and Geosciences Bureau (MGB) and the Metals Industry Research and Development Center (MIRDC) for the establishment of mineral valuation laboratories and facilities, and for acquiring Bureau of Internal Revenue (BIR) tools, funded from the retained BIR share of the Special Education Fund (SEF) under Section 3 of R.A. No. 5447 (as amended).
Under this measure, the estimated revenue impact from 2026 to 2029 is projected at PhP25.08 billion in total or an average of PhP6.26 billion per yea
