High-profit miners would pay more taxes

The rise in international mineral prices has generated that several mining companies benefit and, therefore, obtain higher profits than they projected.

Faced with this metal boom, the Executive It has contemplated -after 10 years- making adjustments to the current mining tax regime, with the aim that companies that have been achieving high profits can have a greater contribution to the treasury.

The changes

One of the initiatives that the Executive would promote – to obtain legislative powers in tax matters – would be to review the mining royalty. What would be sought is to increase the minimum percentage that is applied on sales, which is currently located at 1%.

The former Minister of Economy Luis Miguel Castilla explained that this minimum tax was incorporated in 2011 in order for mining companies to always pay royalties. “If there were negative profits, the right to pay something to the State was always established,” he noted.

In this sense, Castilla Rubio considers that it would not be appropriate to raise the minimum margin, as it could discourage investment.

Another change proposed by the head of the Ministry of Economy and Finance (MEF), Pedro Francke, is to raise the rates for the highest tranches of operating margin (above 75%); In other words, the mining companies that have a higher profit would pay more for Special Mining Tax (IEM).

“As long as they have high operating profits, they would pay more; the mining companies that are in an area or in a metal that do not have very high profits, it would not affect them ”, clarified Francke.

For Castilla, the margin that the Executive has to raise the rate is minimal, since if it decides to raise it too much, the mining sector could lose competitiveness.

For his part, the former Minister of Energy and Mines Carlos Herrera Descalzi He suggested that, before deciding to make changes to the tax regime, it would have to be discussed with the sector.

It is important to mention that Minister Francke stressed that these adjustments will be made with the advice of the International Monetary Fund (IMF) so that competitiveness is not affected.

Francke Ballvé also clarified that, although these changes would not apply to companies that have a tax stability agreement, he did not rule out talking with these companies to have their tax contribution evaluated.

The impossible basis and deductions from operating profit would also be reviewed.

Opinion would be ready in two weeks

The president of the Congress of the republic, María del Carmen Alva, hopes that in two weeks the Economic Commission will have ready the opinion regarding the bill where the Executive Power is given legislative powers in tax, fiscal, financial and economic reactivation matters.

“The Economic Commission meets on Wednesdays, so next week they should be looking at this issue and we hope that they will have the opinion as soon as possible, I imagine that in two weeks they will be able to have it “, Alva told a local radio station.

The word

Luis Miguel Castilla, former Minister of Economy

“They want to increase the minimum tax, increase rates and have a higher tax base, allowing fewer deductions.”