Mexico aims to increase taxes on mining industry

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Mexico aims to increase taxes on mining industry

Mexico's Congress is considering a 4% tax on mining output as part of a fiscal reform package meant to boost government revenues during the recession

 

Mexico's Congress is considering a 4% tax on mining output as part of a fiscal reform package meant to boost government revenues during the recession.

The announcement was criticised by major mining companies, who say the measure will stifle new investment and burden existing projects at a time when metals prices have slumped from record highs.

Tax revenues in Mexico are among the lowest in Latin America and President Felipe Calderon is trying to pass a controversial overhaul of the tax system to reduce the country's dependence on oil revenues, which are decreasing.

Miners now pay taxes on land concessions that range from 50 centavos ($0.03) to 101 pesos ($7.50) a hectare.

Mexico is seen as a top destination for mining investment because of its rich mineral resources and its relatively business-friendly laws.

Major companies in the industry include copper miners Grupo Mexico and Fresnillo, the world's largest silver producer, which is owned by Penoles.

The mining initiative is being discussed separately from the overall fiscal package, although it will be considered in conjunction with the other proposed reforms.

Visit www.internationaltaxreview.com for more on the reforms in Mexico soon

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