DOF rolls out IRR for new mining tax law

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December 21, 2025 | 12:00am

MANILA, Philippines — The Department of Finance (DOF) has issued the implementing rules and regulations (IRR) for Republic Act 12253, also known as the Enhanced Fiscal Regime for Large-Scale Metallic Mining Act, which outlines the updated tax, royalty and revenue-sharing provisions of the law.

Citing potential revenue gains, the DOF expects to generate an average of P6.3 billion a year in additional revenues from existing mining projects, with higher returns anticipated as new investments come in.

“This is a critical step forward in unlocking the full economic potential of the mining sector while maintaining safeguards for transparency, accountability and protection of the environment,” Finance Secretary Frederick Go said.

The rules impose ring-fencing, preventing large-scale metallic mining operators from consolidating income and costs across projects or offsetting losses against profits when computing royalties and windfall profit taxes.

It includes a provision stating that when multiple mining operators operate under the same mineral agreement or financial or technical assistance agreement, each operator will be treated as a separate taxable entity for its respective mining activities.

Metallic mining activities conducted in mineral reservations will be liable for a royalty equivalent to five percent of the total output of extracted or produced minerals or mineral products.

For those outside mineral reservations, a margin-based royalty on income from metallic mining operations exceeding 60 percent will be subject to a five percent rate. Those between 45 percent and 60 percent are subject to four percent and other rates applied to lower margins.

If the margin of large-scale metallic mining operations outside mineral reservations is zero percent or below, a minimum royalty equal to 0.1 percent of the total minerals or mineral products produced will be required.

“The IRR was crafted in consultation with both public and private stakeholders, and sets a well-defined mechanism for just and transparent implementation,” the finance department said.

It also established the Transparency Office for Extractives within the DOF, a multi-stakeholder body tasked with promoting accountability and inclusive governance in the management of the country’s natural resources.