Peru Minister proposes making tax benefit for miners permanent

7th September 2018

By: Reuters

  

Font size: - +

LIMA - Peruvian Energy and Mines Minister Francisco Ismodes on Thursday proposed making a temporary tax benefit for mining companies part of the country's permanent tax code in order to reduce investment uncertainty in the world's No. 2 copper producer.

Miners in Peru have enjoyed refunds on an 18% value-added tax rate for nearly two decades thanks to repeated renewals under market-friendly governments.

But the tax refund tends to face criticism as its expiration nears, and opposition lawmakers have proposed ending it this year. In 2017 and 2016, the government returned about $3.625-billion to mining companies as part of the refund, according to the country's tax agency.

"If this is something that's going to be renewed or extended repeatedly, it's better to just make it part of rules for the (mining) sector," Ismodes told Reuters in a brief interview, stressing that the Economy Ministry would make a final decision.

Ismodes said the government of centrist President Martin Vizcarra would at the least extend the tax benefit past this year, when it is now set to expire.

Mining is a key driver of economic growth in Peru, where international firms such as Anglo American, Glencore and Freeport-McMoRan Inc operate large mines, and scores of smaller companies prospect for new discoveries.

Peru is the world's second largest producer of copper, zinc and silver, and the sixth biggest gold producer.

Ismodes also said he expects Congress to approve proposed legislation aimed at promoting investments in oil and natural gas. The proposal, which would extend the length of exploration and drilling contracts, could draw $6 billion in new energy investments, according to a local industry group.

"We expect that once the law is approved, oil production will rise by 30 000 bbl/d of oil from the current 40 000 average today," Ismodes said.

Peru is a relatively small oil producer and has struggled to compete for energy investments with big regional players such as Brazil, Colombia and Mexico.

Edited by Reuters

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION