Mexico's PAN seeks change to mining tax rules
Investments in mining exploration in Mexico will be 100% tax deductible under plans by the opposition conservative PAN party.
The proposal is among a raft of amendments the party is seeking to add to the federal revenue bill for 2016, which will be signed into law in the coming days.
The move would reverse changes in the ruling PRI party's tax reforms that came into force at the start of 2014. Following the reforms, exploration spending can only be deducted against taxes at a 10% annual rate, rather than 100% previously.
The PAN proposal is in response to falling exploration investment in the country, Marko Cortés, the party's coordinator in the lower house of congress, said.
INDUSTRY SUPPORT
The proposed amendment will be welcomed by Mexico's mining sector.
The current rules were singled out for criticism in industry chamber Camimex's 2015 annual report for further undermining companies' willingness to invest in exploration at a time of weakened metals prices and limited access to finance.
Non-ferrous exploration spending in Mexico fell 26% last year to US$856mn, 48% lower than in 2012, the report added.
The 2014 tax reforms also included a 7.5% mining tax, plus an additional 0.5% charge on gold and silver mining. Mexico is the world's biggest silver producer and a top 10 miner of gold, copper, zinc and lead.
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