President Ollanta Humala of Peru has signed three bills that will in effect raise mining taxes in the country. With this signing on Wednesday Humala fulfills a campaign promise to increase royalties on the lucrative mining sector in Peru.
President Humala said that these resources will be used primarily to fund infrastructure in the poorest parts of the country as a way to bring social inclusion. The tax on profits will help create jobs and finance infrastructure investment such as hospitals, Humala said at the signing ceremony at the Presidential Palace.
Miners who currently pay taxes of 1% of royalties and 3% of sales will now pay between 1 to 12 % royalties on operating profits and a 2 to 8.4% windfall profits tax on net profits. The new President’s team negotiated the rates with the mining companies before sending the bill to Congress this month.
President Humala said that he welcomed this responsible attitude that showed Peru was a place where communities and businesses have a common perspective of well-being. Peru earns the majority of its earnings from the mining sector which is dominated by multinational mining companies. Peru is the third largest producer of copper and zinc in the world and the second largest producer of silver.