Core amendment: gross income exclusion
- Section 1 amends Section 32(B)(7)(i) of the National Internal Revenue Code of 1997 (NIRC) to exclude from gross income and exempt from taxation under this title certain income derived from the sale of gold under Republic Act No. 7076.
- Section 32(B)(7)(i)(1) excludes income derived from the sale of gold to the Bangko Sentral ng Pilipinas by registered small-scale miners, as defined under Republic Act No. 7076, and accredited traders.
- Section 32(B)(7)(i)(2) excludes income derived from the sale of gold by registered small-scale miners to accredited traders for eventual sale to the Bangko Sentral ng Pilipinas.
Core amendment: excise tax exemption
- Section 2 amends Section 151(C) of the NIRC to provide excise tax exemption for gold sold to the Bangko Sentral ng Pilipinas in accordance with Section 32(B)(7)(i).
- Section 151(C) exempts gold which is sold, or eventually sold, the Bangko Sentral ng Pilipinas from the payment of excise tax.
- The Act provides a refund/credit remedy: if the excise tax due thereon had been paid prior to the sale of gold to the Bangko Sentral ng Pilipinas, the taxpayer may file a claim for refund or credit with the Commissioner for the excise tax paid (Section 151(C) proviso).
Tax treatment of small-scale miners’ sale chain
- Section 3 grants that, in addition to existing rules and notwithstanding Republic Act No. 6938, as amended, and other applicable laws, the sale of gold by registered small-scale miners (as defined under Republic Act No. 7076) to accredited traders for eventual sale to the Bangko Sentral ng Pilipinas receives the same tax treatment and privileges as the direct sale of gold to the Bangko Sentral ng Pilipinas under the Tax Code.
Presumption on gold source
- Section 4 establishes a presumption: all gold sold to the Bangko Sentral ng Pilipinas by accredited traders shall be presumed to have been purchased by those traders from small-scale miners.
Implementing rules, recommendations, and registration
- Section 5 requires the Governor of the Bangko Sentral ng Pilipinas, the Secretary of Environment and Natural Resources, the Secretary of the Interior and Local Government, and the Commissioner of Internal Revenue to recommend to the Secretary of Finance the rules and regulations needed for effective implementation.
- The recommendation for promulgation must be made within sixty (60) days after the effectivity of this Act (Section 5).
- The rules and regulations must include registration and accreditation requirements of small-scale miners and traders to avail of the Act’s tax exemptions (Section 5).
- The Secretary of Finance is the party to which the recommendations are directed for promulgation (Section 5).
Revocation, separability, and compliance effects
- Section 6 revokes, repeals, or modifies accordingly all laws, executive/administrative orders, rules, regulations and other issuances or parts thereof that are inconsistent with Republic Act No. 11256.
- Section 7 provides separability: if any provision is declared unconstitutional, it does not affect the validity of the other provisions of the Act (Section 7).