Chile considers adjusting mining tax

       Last week, Chile's energy and Mining Committee of the lower house of Congress proposed a bill to modify the copper and lithium royalty, aiming to levy 3% royalty on enterprises with copper smelting capacity of more than 12000 tons and lithium production capacity of more than 50000 tons according to the output value of mineral products. This income will be used for investment in the area where the mine is located to reduce the environmental damage caused by mining.

At present, the main mining companies in Chile have to pay 27% of the company tax. In addition, according to the capacity, they have to pay 5-14% of the special mining tax. According to the Budget Office of the Chilean government, the special mining tax revenue accounts for 0.4% of the country's GDP. Chile's mining Commission considers the country's tax rate to be one of the highest in the world, second only to Australia.

The special mining tax has been levied since 2005, and mining enterprises pay the tax rate of 5% based on the operating profit. But in 2010, in order to make up for the funding gap of earthquake resistance, the tax rate was increased for two years. The tax rate of mining projects with production capacity less than 50000 tons shall be 9%, and those with production capacity higher than 50000 tons shall be 14%.

The Chilean mining chamber of Commerce, the mining association and the mining commission all believe that the bill currently under discussion is an obstacle to mining investment. In the coming weeks, the proposal will be referred to the constitutional, legislative and judicial committees for discussion. The house of Commons then voted unanimously to hand it over to the Senate.