Central Gov’t to Beef Up Resources for 985 Districts Affected by Lower Mining Tax Income

August 30, 2013 8:55 pm2 commentsViews: 123

Castilla, Luis Miguel -Aug-2013Peru’s central government is to transfer extra resources to 985 districts in the Andean country to help compensate for lower tax income from the mining sector, according to the state news agency, Andina.

Finance Minister Luis Miguel Castilla said districts that have received less than 355,000 soles ($128,000) will receive the added resources.

“This measure will help to fully cover the lower income for 985 of the 1,557 local governments and four regional governments,” Castilla said.

Mining companies pay a tax called the canon which is distributed to the central government, regional governments and municipal governments, based on where the mining operation is located.

Mining accounts for an important part of government tax revenue, which has decreased due to lower profits earned by mining companies, largely due to lower metal prices.

Castilla said the transfer to the local districts is to help prevent the postponement or even cancellation of investment projects.

“In the future, we’ll have to create mechanisms that ensure the predictability of revenue and avoid that investment projects be affected by volatile variables,” he said.

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2 Comments

  • Perhaps if the people and governments of these regions weren’t fighting Mining so fiercely, there would BE a ‘tax base’ from Mining.

    It is difficult to collect taxes from Mines that can’t work, or can’t even get started. Moreover, it is difficult to tax mines that no longer function, as Ecuador’s government just found out when they tried to Tax a Gold Mine a percentage that was higher than their operating profit….and the Mining Company left a 2.5 Billion dollar investment.

  • How in the hell can there be lower profits when the price of gold is at a all time high. Somebody needs to check on the mining companies books and the government officials pockets