RA 12253 (ENHANCED FISCAL REGIME FOR THE MINING INDUSTRY ACT)
On December 18, 2025, Department of Finance Secretary, Hon. Frederick D. Go, issued the Implementing Rules and Regulations of Republic Act No. 12253, otherwise known as the Enhanced Fiscal Regime for the Mining Industry Act. The IRR shall be operative on February 17, 2026.
RA 12253, which consolidates the provisions of House Bill No. 8937 and Senate Bill No. 2826, was signed by President Ferdinand R. Marcos, Jr. last September 4, 2025. The said law 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 the enhanced fiscal regime are as follows:
- Imposing (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;
- 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; and
- 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.
In my humble opinion, while the law will surely generate the much-needed revenue in the short term, i.e., the estimated revenue impact from 2026 to 2029 is projected at PhP25.08 billion in total or an average of PhP6.26 billion per year, it may not contribute to revitalizing the mining industry as it will drive away potential investors, both international and domestic. Already heavily regulated, this additional tax burden may push capital to other industries. To generate more revenue, it could have been a good strategy to entice investors to put up processing plants which will process the ores and generate more taxes for the finish products. For now, mining companies would brace the impact of this new mining fiscal regime, except those with government contracts which ensures that only favorable provisions of a prospective law, rules and regulations will be deemed incorporated in its mineral agreement invoking its constitutional right against impairment of contractual obligation.