Peru has room to increase progressivity of the mining tax regime, says the IMF

The International Monetary Fund (IMF) presented this week its preliminary report on the Peruvian disc regime, one of the points evaluated being mining tax regime.

In this regard, the IMF highlighted that the current regime is progressive based on a profit-based scheme, a characteristic that the Fund considers important to maintain Peru’s competitiveness as a destination for mining investment. It also specified that the Peruvian tax system for mining is internationally competitive, with a lower or similar burden to other countries rich in natural resources.

In this way, the international organization mentioned that, within said scheme there is still room to increase progressivity.

According to calculations by the Ministry of Economy and Finance (MEF), from April 2020, the month in which the export prices of our main minerals began to rise, until September of this year, 27.9% of the total exported was the product of This effect, that is, an additional US $ 13,673 million came only from higher prices.

Meanwhile, the Central Reserve Bank of Peru (BCRP) estimates that the terms of trade would reach their highest point in the last 20 years between 2021 and 2022, even surpassing those registered in the previous boom. In addition, the global energy transition process will increase the demand and the price of metals such as tin and, above all, copper. For this reason, it is estimated that, in the medium and long term, the copper price will be approximately 25% higher than the 2020 price. Hence the need to carry out the tax reform before the end of this year.

It is important to take into consideration that, in 2020, only 69 companies were affected by this regime, since the current fiscal scheme excludes small-scale mining and artisanal mining. The final report of the IMF It will be presented in the coming weeks.