The load will increase from 40.1% to 46.6% for large producers. With the funds, the Government of Gabriel Boric hopes to distribute the funds in all regions.
Santiago – The Chilean Congress yesterday approved an increase in the specific tax on large copper and lithium mining, with which it seeks to generate additional resources for social projects in the country, the world’s leading producer of the red metal. The initiative will generate an additional 1.5 billion dollars for the Chilean State, a third of which will be distributed among all the regions of the country.
“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.
The increase in the special exploitation tax will “allow the distribution of a third of these resources to all regions of the country, to the mining communes most affected by mining activity in their territories and to 302 communes that are those with the fewest resources,” added the Minister.
With an annual production of 5.6 million tons, equivalent to about a quarter of the global supply, Chile is the main copper producer. Mining giants such as the Anglo-Australian BHP and the British Anglo American operate in the country, as well as the state-owned Codelco.
The initiative was approved by 101 votes in favor, 24 against and three abstentions in the Chamber of Deputies, which in a special session yesterday reviewed the amendments entered into the bill in the Senate, in the last legislative process before it is promulgated.
The new law impacts large copper mining, by excluding companies that produce less than 50,000 metric tons of fine copper (TMCF) per year.
For those that produce an equal or greater quantity, it introduces the payment of an ‘ad valorem’ tax (according to the value of a good) of 1% on sales, as well as the payment of rates of between 8% and 26% on the mining operating income.
A maximum tax burden of 45.5% is established for companies with a production of less than 80,000 TMCF and 46.5% for the rest.
According to the Chilean government, the law leaves the country’s average effective tax burden at 40.1%, “below that of other copper-producing countries,” such as Peru, which has 41.4%, and Australia, with 42, 3%. Currently, the rate in Chile is 35.5%.