Govt. proposes revising ICM tax

Friday, February 11, 2005

Bolivia's President Carlos Mesa has raised the possibility of revising the percentage of the complementary mining tax (ICM) as the local mining sector is passing through a "distinct historic moment" regarding international mineral prices, news agency ABL reported.

"Now that international prices are attractive, I believe this tax must be revised and [the new situation in the market] taken into account," ABL quoted Mesa as saying.

However, the government cannot talk about specific tax increase percentages, according to new mining minister Jorge Espinoza. "We must not expect to go much higher," he said.

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It will be necessary to hold dialog with mining industry players to agree on a series of criteria to allow the proposal to move forward, he added.

This issue was first brought up in November 2004 by Mesa's government through a bill envisaging ICM modifications to the taxation-scale for zinc and silver of 1-5% depending on the metals' prices. Currently a tax of 1% is applied.

The Bolivia's medium-sized mining association (AMMB) has rejected the bill because "it would discourage new projects in the country," AMMB secretary general Hugo Uriona said.