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Two
weeks ago, this report from Resource Clips bannered a bold story, Mining industry has paid Canada $71 billion in last 10
years.
Excerpts:
“The Mining Association of Canada released its annual report on December
3 about mining industry payments to Canadian governments, prepared by ENTRANS
Policy Research Group. Now in its tenth year of publication, the report found
mining payments to federal and provincial government coffers total an estimated
$71 billion from 2003 to 2012 in aggregate mining taxes and royalties,
corporate income taxes and personal income taxes paid by mining sector
employees….
“According to Natural
Resources Canada, the Canadian mining industry employed more than 418,000
workers across the country in 2012—representing one in every 41 Canadian jobs.
Moreover, mining workers earn the highest wages and salaries of all industrial
sectors in Canada. The average weekly pay for a mining worker in 2012 was
$1,599, which surpassed the earnings of workers in forestry, manufacturing,
finance and construction.”
The
71 billion Canadian dollar is equivalent to around US$ 78 billion at average
exchange rate of CA$1.1/US$ exchange rate from 2003-2012. That is an average of
US$ 7.8 billion a year, wow.
The
Philippines, which is supposed to be a mining powerhouse with an estimated
mineral potential value of around US$ 1 trillion, is not able to optimize both
its mining corporate revenues and taxes. From 2008 to 2011, the Philippine
government was able to collect only around $310 million a year in corporate
taxes, fees and royalties, from large-scale mining companies.
Source: Dr. Elmer Billedo, Assistant Director,
MGB-DENR. Presentation at an EITI Conference, September 27, 2013, Crowne Plaza,
Ortigas, M.Manila.
The
above Philippine data of mining taxes, fees and royalties is understated
because (a) it covers only large scale mining firms, and excludes small scale
mining that produce huge amount of gold via the black market, and (b) personal
income taxes, social security contributions by workers and officials of large
mining firms are also not included. By how much is the projected understatement?
Maybe +/- $150 million per year, a rough estimate.
The
way business uncertainty and financial instability is inserted in the country’s
mining sector, both the economy and the government are the net losers here, as
shown by preliminary 2012 and 2013 data from the MGB-DENR.
Mining
gross value production in 2012 was comparable to that in 2010 but lower than in
2011. Production this year, if the first half figures are the basis, should be
less than P100 billion, which is even lower than 2009 and 2010 production.
In
terms of taxes, fees and royalties collection, this year can be a catastrophe
compared to collections in 2008 (P7.7 billion), 2009-2012.
The
national government itself should be alarmed of this trend. If certain sectors
are against large and corporate mining due to environmental, cultural,
political or religious reasons, the national government should help explain to
them the threat to people’s livelihood and fiscal shrinkage of collections from
the sector. Very often, the same group of people who express strong opposition
to large scale mining are also lobbying for more government welfare and subsidy
programs, which are sourced from taxes and regulatory fees collection.
The
$0.3 billion Philippine government collections from the large mining firms should
see shrinkage in the coming years if anti-large mining and anti-capitalism
sentiments are not checked and neutralized.
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See also:
Mining 34: EITI, Taxes and Other Costs of Regulations, September 24, 2013
Mining 35: Opposition to Mining, Where Do They Come From?, October 15, 2013
Mining 36: Tax that can Wipe Out All PH Public Debt, October 22, 2013
Mining 37: Adverse Selection of Anti-Corporate Mining View, November 21, 2013
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