SNMPE against changes to the mining tax regime proposed by the MEF

The National Society of Mining, Oil and Energy (SNMPE) expressed its concern at the request for powers of the Ministry of Economy and Finance (MEF), which seeks to modify the mining tax regime as part of the tax reform.

The mining-energy union said that the proposals being considered by the MEF they would inevitably erode the competitiveness and sustainability of Peruvian mining, which plays a fundamental role in the process of reactivating the national economy.

“The MEF wrongly points out that the charges that the mining sector has reach 41% of profits and that there is room to raise taxes on mining, without supporting this position. We consider that there is ample evidence that the tax burden on mining currently approaches 50% of profits and is higher than that in Chile (40.7%), Canada (35.5%) and Australia ( 44.3%), mining countries with which Peru competes directly ”, he commented in reference to the studies carried out by IPE, Apoyo, Cepal, EY-Peru, and CESCO.

The business union stated that if a wrong diagnosis is made to carry out the change in tax rules, the strengths of formal mining will be undermined and a highly adverse impact will be generated for the peruvian economy, since it would discourage investments in expansions of mines already in operation and in new mining projects. This translated into a danger to future investments of more than US $ 50,000 million.

The SNMPE reported that this year mining contributions to the Treasury will reach a historical record figure of S / 13,500 million, tripling the amounts paid in 2019.

“That is to say that, without changing any tax, the State will receive this year, almost S / 9,000 million in additional contributions from the mining sector,” he stressed, indicating that, if current price levels are maintained, in this five-year period the The Treasury could be collecting some S / 100,000 million from mining, which would be another historical record.

Along these lines, he stressed that this important tax contribution by the mining sector is sustained by the good prices of minerals and the higher production achieved thanks to the more than US $ 50,000 million that were invested during the last decade in different projects.