RR No. 7-2008: Prescribes the regulations to govern the taxation on the sale to the Bangko Sentral ng Pilipinas of gold and other metallic mineral products extracted or produced by small-scale miners and further amends RR No. 2-98, as amended

Summary

RR No. 7-2008 prescribes how sales of gold and other metallic mineral products by small-scale miners to the Bangko Sentral ng Pilipinas (BSP) are taxed under RA No. 7076, and further amends Section 2.57.2(T) of RR No. 2-98.

Key points

1. Taxes on small-scale mining contract holders. Sales of gold to the BSP bear 2% Excise Tax under Section 151(A)(3)(b), based on actual market value, and 0% VAT under Section 106(A)(2)(a)(4). Income Tax follows Sections 24(A) and 27(A), and a 10% Creditable Withholding Tax (CWT) applies.
2. Amended Section 2.57.2(T). Income payments on purchases of minerals, mineral products and quarry resources, such as silver, gold, marble, granite, gravel, sand and boulders, are subject to ten percent (10%) tax.
3. BSP as collection agent. All gold from small-scale miners is sold to the BSP at prices competitive with the world market. The BSP deducts the 2% Excise Tax from its payment to the miner, in addition to the 10% CWT.
4. Excise Tax remittance. The BSP files BIR Form No. 2200-M and pays the Excise Tax to the Accredited Agent Bank having jurisdiction over its principal place of business on or before the tenth (10th) day of the following month.
5. CWT remittance. The BSP reports the CWT as one line item with the phrase Gold miners/suppliers under PD 1899, as amended by RA No. 7076, in BIR Form No. 1601-E. It files within ten (10) days after each month end, except December, which is due on or before January 15 of the following year. If it uses the Electronic Filing and Payment System, the deadline stays at the 15th day of the following month.

Who is affected

• Small-scale miners holding small-scale mining contracts
• Bangko Sentral ng Pilipinas as withholding agent

Deadlines and effectivity

• Excise Tax return and payment: on or before the 10th day of the following month
• CWT return: within 10 days after each month end
• December CWT: on or before January 15 of the following year
• EFPS filers: 15th day of the following month

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.