Mining companies that have projects in the exploration phase will continue to have tax benefits until December 31, 2027. The State will return the General Sales Tax (IGV) and the Municipal Promotion Tax that they pay during their exploration work.
The norm was already published in the newspaper El Peruano on December 30, 2022 and came into effect from this year. Congress approved this law on the grounds that the extension of these tax benefits was necessary to encourage companies to continue investing in exploration. The exoneration expired on December 31, 2022. It was in force under laws 27623 and 27624.
The projects
The Congress was based on the portfolio of projects prepared annually by the Ministry of Energy and Mines (Minem). According to this study, throughout the country there are 63 projects in the exploration phase that imply a global investment amount of 586 million dollars. Of this number of projects, only 36% of the investments are close to starting exploration work.
In Arequipa, the possible beneficiaries are 8 projects for a total investment amount of 89 million dollars. (See infographic).
According to the Ministry of Energy, those that stand out for their level of investment are the copper project called Chapitos and Caylloma, which will explore the silver reserves.
There are others in the south of the country, like moquegua, where there are two projects for 45 million dollars. In Cusco, there are 3 projects for $8 million, while in Puno there are 4 for $14 million, in Tacna 3 for $22 million and in Apurímac there are 4 for $13 million.
For the economist Epifanio Baca, As these are high-risk investments that do not generate income, the rule turns out to be positive. “It benefits all the companies that invest in exploration, which incidentally has decreased sharply,” Baca said.
Portfolio of mining exploration projects in Arequipa. Photo: The Republic
It should be noted that Law 2763 has been in force since 2003 during the government of Alejandro Toledo. It was modified and extended until now it has this new extension. According to Congress itself, during its term, a total of 181 mining exploration projects have benefited, of which 94 requested a refund of taxes, for which the Peruvian State returned 455 million soles.
In addition, another 11 gave rise to mining projects in operation that implied an investment of 15 billion dollars.
Investments decline
The congressmen also relied on the Fraser investment attractiveness index, which shows that Investments in the mining sector in Peru went from 905 million dollars in 2012 to 329 million dollars in 2021.
On December 21, 2022, this standard in the Congress It was approved with 63 votes in favor. During the debate, some legislators were against it, considering that too many benefits were being given to companies that exploit natural resources. Puno congressman Flavio Cruz was one of them. “It seems that Congress is handing over the country into the hands of the transnationals,” he said on that occasion.
It should be noted that this project was presented by the Executive, which at that time was chaired by Pedro Castillo.
Phases of exploration projects
During this phase, mining projects submit various requests for approval of the Environmental Management Instrument (IGA). For this reason, they are classified into different stages, which are: the evaluation of the IGA, evaluation of the exploration authorization that must be issued by the General Directorate of Mining.
When the previous stages are fulfilled, the exploration authorization that qualifies a project as suitable for exploration activity is given.
Source: Larepublica
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