Chile approves increasing the tax on mining companies to benefit the poorest

He Mining Royalty It is an initiative of the Government of President Gabriel Boric that has been approved by Congress this Wednesday, May 17. It consists of raising taxes on large-scale mining to provide more resources to the regions and, in this way, they seek to promote investment, development and a better quality of life for families in more than 300 municipalities in Chile.

“The Mining Royalty will be law! Thanks to a transversal agreement, we approved a project that will allow us to better distribute the wealth we generate among all of us. We advance in decentralization and in the delivery of more resources to all regions of Chile,” he said in President Boric’s official Twitter account.

with the Royalty It is expected to distribute an additional US$450 million to regional governments and municipalities that will be divided into three funds: for productivity and development (US$225 million), mining communes (US$55 million) and support for territorial equity (US$170 million).

Although Royalty collection would begin to reach the regions in 2025, in order to advance resources for subnational governments, an agreement protocol was signed establishing three new regional and community funds, some charged to the 2024 public budget.

How does the Mining Royalty work?

This mechanism establishes that the maximum potential tax burden will be the ceiling that large mining companies will pay in taxes, considering the payment of the specific tax or royalty, the first category tax and the final taxes.

• Companies that produce more than 80,000 metric tons of fine copper: 46.5% on adjusted mining operational taxable income (Rioma).
• Companies that produce between 50,000 and 80,000 metric tons of fine copper: 45.5% on adjusted mining operational taxable income (Rioma).

“This is a project that will allow the state to increase its participation in the economic rents from copper mining,” Finance Minister Mario Marcel said after the vote in congress.