Finance Secretary Carlos Dominguez III signed a new set of revenue regulations reducing the creditable withholding tax on gold sales from 5 percent to 1 percent, a move seen to encourage small-scale miners to sell back their gold produce to the Bangko Sentral ng Pilipinas.
The Finance Department said in a statement Wednesday the new revenue regulations also kept the excise tax on gold sales at 2 percent.
Dominguez said the policy-making Monetary Board of the Bangko Sentral was already advised of the new regulations prescribing the new creditable withholding tax rate for gold sales.
“With this new tax rate and the possible reduction both in the assay fee and in the processing of gold payments in the Security Plant Complex, small-scale gold miners have committed to sell back their gold produce to the BSP,” Dominguez said.
Dominguez said he would “propose bottom line-friendly appropriate numbers to the Monetary Board in consultation with SPC.”
He said the new CWT rate would help gold miners in the cities of Davao, Zamboanga, Naga and Baguio to get a fair market price for their gold produce instead of being shortchanged when they sell to the black market.
“We will also be working with the Congress to institutionalize this revenue regulation through an appropriate amendment to the National Internal Revenue Code,” Dominguez said.
Dominguez said besides helping small scale miners, the new regulations would also allow the BSP to build its gross international reserves without having to spend dollars, as it would now be able to buy gold directly using local currency.
“Unlike using pesos to buy foreign exchange to buy gold, which will affect the peso dollar rate, this flexibility will not have a direct impact on the movement of the peso against the dollar,” Dominguez said.
The BSP purchases gold from small-scale miners in accordance with Republic Act No. 7076 or the People’s Small Scale Mining Act of 1991, and from other sources. It then refines the gold purchased into forms acceptable in the international bullion markets.
It has five gold-buying stations in Quezon City and the cities of Baguio, Davao, Zamboanga and Naga.