Philippines

Enhanced Fiscal Regime for Large-Scale Metallic Mining Act 

On 4 September 2025, Republic Act No. 12253 or the Enhanced Fiscal Regime for Large-Scale Metallic Mining Act was signed into law, overhauling the fiscal framework for large-scale metallic mining in the Philippines. The new fiscal regime takes effect on 17 February 2026. 

Key changes 

• Margin‑based royalties outside reservations: Royalties are now based on profit margins, ranging from 1% to 5%. A minimum royalty of 0.1% applies to low-margin mines. 

• Windfall Profits Tax (WPT): A tiered tax from 1% to 10% is imposed on excess profits during commodity price surges. 

• Per‑project ring‑fencing: Each mining project is taxed separately. Losses from one project cannot offset profits from another. 

• Thin‑capitalization limit (2:1): Interest deductions on related-party debt are limited to a 2:1 debt-to-equity ratio. 

• Royalty collection by BIR: The Bureau of Internal Revenue (BIR) is now responsible for collecting royalties. 

• Audit and transparency rules: Mining companies must disclose financial and operational data. Confidentiality restrictions are lifted for regulatory purposes. 

Retained provisions 

• 4% excise tax on mineral products: Continues to apply regardless of profitability, as provided under RA No. 7942 (Philippine Mining Act of 1995). 

• 5% royalty inside mineral reservations: Still imposed on gross output of the minerals or mineral products extracted or produced within designated mineral reservation areas under RA No. 7942. 

• Gross Output: As defined under Section 151(B)(1) of the Tax Code. 

• 1% minimum royalty for ICCs: Maintained to ensure ICCs receive a guaranteed share from mining activities, based on Section 16 of DENR Administrative Order No. 96-40, Series of 1996. 

Republic Act No. 12235: Strengthening Controls on Denatured Alcohol 

On 29 August 2025, the Philippines enacted Republic Act No. 12235, amending Sections 134 and 168 of the National Internal Revenue Code. The law clarifies that ethyl alcohol with at least 180° proof (90% ABV), when properly denatured and rendered unfit for drinking, is exempt from excise tax. It also specifies the tax treatment if alcohol is used for other purposes or reprocessed for drinking. Additionally, RA No. 12235 requires denaturing before removal from registered facilities and directs the Bureau of Internal Revenue to issue rules on approved denaturants, testing, and oversight. The measure aims to prevent diversion of industrial alcohol for human consumption while maintaining exemptions for legitimate use.