The version imposes a 1- to 5-percent margin-based royalty tax on large-scale mines and a 1- to 10-percent
windfall profits tax on income from mining operations.
"The Chamber stands by its position that a structure based on a profits-based royalty and a
windfall profits tax as passed by the House of Representatives, with the rates thereon tied to operating margins, is the most equitable manner in achieving this," Dimaculangan said.
This includes a 1-5 percent margin-based royalty tax on large-scale mines outside of mineral reservations, depending on operation margins, a 1-10 percent
windfall profits tax on income from mining operations, 3 percent royalty tax on gross output on mines inside mineral reservations, 4 percent excise tax on gross output, and ring-fencing and maximum debt to equity ratio.
Small-scale mining operations, whether within or outside of mineral reservations, will pay royalty amounting to 1/10 of 1 percent of gross output, levying
windfall profits tax to secure the government's fair share.
In a deal approved under the Carter administration and accelerated when Reagan took office, the price controls (all in the energy sector) that still remained from Nixon's original broad-based freeze were removed by 1981 and replaced by a
windfall profits tax (WPT) on crude oil that was to be in force until 1988.
The Ecuadorian government, motivated by their new law project, demanded a 70 percent, revenue-based
windfall profits tax on the mining site that Kinross' was not ready to agree to.
was not eligible to claim a foreign tax credit for its payment of the
windfall profits tax because the tax did not meet the gross receipts requirement of Regs.
The government intends to make legal reforms to mitigate the effects of the
windfall profits tax and enhance the investment climate which Kinross believes to be critical to the negotiations, the company added.
Following high copper and gold prices in 2006, the Mongolian government hastily passed a
windfall profits tax. This was designed to allow the state to benefit from high prices, but instead set the stage for acrimonious negotiations with the Oyu Tolgoi mine project developer, Ivanhoe Mines Ltd.
A
windfall profits tax is a higher tax rate on profits that ensue from a sudden windfall gain to a particular company or industry.