MINING FINANCE & INVESTMENTECONOMIC COMMISSION REVIEW Bolivia to...

MINING FINANCE & INVESTMENT
ECONOMIC COMMISSION REVIEW
Bolivia to create 12.5 percent mining company net profits tax
Bolivia’s government has dropped its controversial proposed 10% hike in the Mining Complementary Tax (ICM) in favor of a new 12.5% net mining company profits tax (IUM).

Author: Dorothy Kosich
Posted: Wednesday , 16 May 2007

RENO, NV -

The Bolivian government has proposed a 12.5% net income mining company profits tax (IUM), and decided against a controversial proposed increase of the Mining Complementary Tax (ICM).

Mining Minister Luis Alberto Echazu told the official government news service Agencia Boliviana de Información that there was no basis to news stories reporting that the government wanted a 10% increase in the ICM tax.

Alberto Echazu told Business News Americas that the IUM is a special mining tax that will be applied to the net income of operating companies. He emphasized that the complementary tax will remain at its current levels, which range between 1% and 5%.

In February more than 20,000 members of independent miners' cooperatives protested in La Paz against a 10% increase in the ICM proposed by Bolivian President Evo Morales, who was hoping to raise as much as US$300 million in government revenues. Bolivia earned $45.5 million in mining tax revenue in 2006.

However, after the protestors threw dynamite and blocked traffic in the capital city's center, Morales agreed to free the independent miners' taxes and aim the tax hike at large mining companies operating in Bolivia.

The IUM proposal has been submitted to Bolivia's economic policy council, Conape, for consideration. If the commission approves the increase, it will be sent to Bolivia's National Congress for their review.