MANILA, 26 November 2021- Tax justice and human rights activists today trooped to the Department of Finance to protest the undue tax privileges given to and the tax abuses of mining corporations.
“Are you truly Santa?” they sang to the tune of “Santa Clause is Coming to Town,” in reference to the privileges given by government to mining corporations on the pretext that mining contributes significantly to the economy and the communities where they operate. In April, the Duterte government lifted a 9-year ban on issuing new mining licenses and rationalized incentives to the extractive industry.
Luke Espiritu, president of the Bukluran ng Manggagawang Pilipino (BMP), said the Department of Finance (DOF) should be working toward progressive taxation and stop championing elite and corporate interests.
“While the world is still coming to terms with the effects of the coronavirus pandemic and the urgent challenge of economic recovery, it has been “business as usual” for the extractive industry’ and some of its shady operations. Mining corporations are raking in huge profits even under COVID-19 restrictions on most other economic activities,” he said.
BMP was among groups who held a rally in front of the Bureau of Internal Revenue against tax abuses of mining corporations on November 19. They put the spotlight on a corporation wholly owned by APEX Mining, one the most profitable companies in the Philippines, that has been exposed for profit shifting in the Pandora Papers, the large-scale investigation conducted and published by the International Consortium of Investigative Journalists through a team of journalists from 150 news outlets in 117 countries. The Pandora Papers mentioned several prominent Filipino names and families.
“Workers are squeezed dry, work in very bad conditions for very minimum wages, but the government only watches out for business. Government only provides corporations with even more relief from paying direct taxes. This effectively reduces potential revenues for public coffers – precious resources needed especially at this time of pandemic and economic crisis,” Espiritu said.
“Baliw. (Mad.) This government is mad in charging mining corporations very low taxes and giving them free rein with our gold, nickel, and copper,” Espiritu said. He lamented that mining corporations are even allowed by government to form their own private armies.
Sanlakas secretary general Atty. Aaron Pedrosa noted that the extractive sector is booming, For the first half of 2021 alone Nickel Asia earned ₱2.73 billion, a 579% jump from the same period last year; Atlas Mining gained a net income of ₱1.9 billion; and, Semirara Mining almost tripled its net income to ₱6.28 billion from ₱2.2 billion last year.
“Mining is touted to be a driver of our economic recovery but far from it, we are only seeing its recovery as mining companies rake in super profits,” he said, adding that the government is complicit in fueling the setup as “it is overly generous to business, providing guarantees, fiscal and non-fiscal incentives for decades.”
Incentives include, under FTAA (Financial or Technical Assistance Agreement), incentive for Income Tax-Carry Forward of Losses; incentive for Income Tax-Accelerated Depreciation; Amortization of Exploration and Development Expenses; and, Incentives for Expansions and Modifications to Existing Facilities and for Development of New Mineral Resources.
He added that the DOF has engineered a series of tax reforms under the guise of ‘rationalizing corporate tax incentives’ that escalates the reduction of corporate income tax rates. “This follows the global trend of ‘racing to the bottom’ of minimum corporate tax rates to provide the most profitable business environment for corporations. By DOF’s own admittance, for the first time in Philippines’ recent history, it has promoted a revenue-eroding tax reform in the CREATE law,” he said.
Flora Santos, president of Oriang, castigated Dominguez’s recent statement rejecting the legislative proposal for a wealth tax. “Our people are going hungry, but this government continues to rely on regressive taxation. For poor people, this means high prices for some of their most basic necessities. We pay VAT for almost everything we consume but get no services from this government, not even for the most essential needs for health care and housing.”
Meanwhile, Lidy Nacpil, coordinator of the Asian People’s Movement on Debt and Development (APMDD), expounded on the Global Days of Action on Tax Justice in the Extractive Industry in a virtual press briefing that followed the rally. “This is part of the effort globally led by many groups and movements to expose the abuses of multinational companies, particularly mining companies, and counting among the abuses is not just abuse of labor, abuse of the environment, but also abuse of taxes,” explained Lidy Nacpil, coordinator of APMDD.
“We know that mining companies are earning trillions of dollars worldwide and most mining companies are multinationals operating in many countries. One of the ways that they ensure huge profits is to avoid and evade taxes and to court governments to provide tax incentives for them based on a myth on the benefits of their operations. It is a myth because it has been proven that mining does not really add to the real economic benefit for people and communities in our countries,” she added.
The Global Alliance for Tax Justice (GATJ) called for Global Days of Action for Tax Justice in the Extractive Industry on 25-26 November noting that “While the world grapples with the continuing impacts of the pandemic and the urgent challenge of economic rebuilding, it is ‘business as usual’ for the extractive industry. Considered an essential service in many parts of the world, its operations have been exempt from lockdown and other restrictions. It continues to benefit from tax incentives regimes, accumulating wealth and profit for conglomerates and elite countries where they are registered. From the Swiss leaks to the Paradise Papers, and the most recent expose, the Pandora Papers, the extractive industry has been linked to the layers of financial secrecy that produce illicit financial flows and the web of tax havens that enable massive profit shifting and systematic tax avoidance.”
To the tune of Sta Claus Is Coming To Town, Philippine tax justice groups denounced mining corporations singing “Are You Really the Santa Claus They Say You Are?” in a rally in front of the Bureau of Internal Revenue last November 19.
♫ A bearer of gifts, they say, you are
But what a pittance, they turn out to be ♪
Are you really, the Santa Claus they say…
The campaign for tax justice in the extractive industry in the country is part of an economic justice agenda that includes the call to make taxes work for people and the planet.
Bukluran ng Manggagawang Pilipino