By DELIA BAGNI
LA TRINIDAD — Gold trading in the Cordillera Administrative Region (CAR) decreased tremendously due to gold smuggling to China via Hongkong, allegedly by small scale miners.
According to Benguet Govermor Nestor Fongwan gold trading in the region decreased by 10%. He said that the biggest factor that affected the decrease was the imposed Revenue Regulation No. 6-2012, by the Bureau of Internal Revenue (BIR), a 7% tax increase in gold sold to Bangko Sentral ng Pilipinas (BSP) in 2011. The tax is made up of a 5-percent withholding tax and a 2-percent excise tax upon extraction.
All gold mined in the Philippines is required by law to be sold to BSP, however traders buying gold from small scale miners (SSM) in the region resell the gold to foreign buyers, who in turn export them mostly to Hong Kong.
Fongwan added that gold sold to the BSP is usually done by traders and not the SSM, and traders cannot impose the additional tax on SSM selling their gold in small amounts.
Vice-governor Crescencio Pacalso stated that SSM look for the traders that buy gold and do not impose the government tax.
He added that the 7% tax imposed is too much for a small scale miner, P1,000 tax on 10 grams of gold is a big amount to miners specially to those with families and children going to school.
Fongwan said that BIR must come up with a better strategy on how to tax gold. He added that BIR, the miners and central bank should sit and discuss together and set policies and guidelines to address the matter.
He added that they must come up with a more enticing strategy to encourage the miners to sell their gold to them. The increase works for the government but not for the miners and the economy. The guidelines should not scare the people concerned but to monitor and help them. # nordis.net