Tax benefits extended for five more years for mining and hydrocarbon exploration in Peru

This is an automated translation of the original release from the Congress of the Republic published in Spanish.

The Energy and Mines Commission approved to extend until December 31, 2027, the validity of Law 27623, Law that provides for the refund of the General Sales Tax and Municipal Promotion Tax to the owners of mining activity during the exploration phase; and Law No. 27624, which provides for the refund of the General Sales Tax and Municipal Promotion Tax for hydrocarbon exploration.

Bill 3195/2022-PE, which was sent by the executive branch, is based on the fact that mining and hydrocarbon exploration are activities that by their nature involve long periods of execution, high investment amounts, a high risk of return of investment and do not necessarily guarantee findings that allow their exploitation.

Another consideration in the foundation of the standard is that mining and hydrocarbon exploration activities are not only a source of private investment, formal jobs, but also a significant future source of fiscal resources for local governments and the central government.

Jorge Flores Ancachi (Popular Action), president of the Energy and Mines Commission, stated that it is our duty to recover and generate a new cycle of mining investment for the next five years, to achieve more jobs, more income for the public treasury and greater royalties for the regions. The extension of the validity of the tax benefit is a measure that will allow these activities to continue to be promoted in order to increase mineral reserves in the country, he said.

Elizabeth Medina Hermosilla (Perú Libre), argued that the IGV exemption is absurd because it does not guarantee the recovery of competitiveness. The companies have only come to extract the oil explored and discovered years ago, then abandon the facilities and leave no reserves.

The companies executed more than two thousand exploitation wells and what are the results, the legislator asked. They call themselves liberals, but they only work with a mercantile vision, this law has already been in force for 20 years, but they want more. The ministers must come with proposals, they are not doing their job, he stated.

CONCEPTUAL DEFINITION OF BIOFUEL

Authored by legislator Carlos Alva Rojas, (Integrity and Development), the PL was approved that modifies Article No. 2 of Law 28054, Law for the Promotion of the Biofuels Market, which specifies the conceptual definition of biofuel.

The definition of biofuel according to the approved standard is: "Biofuel is understood as chemical products obtained from raw materials of agricultural, agro-industrial or other form of biomass and those derived from renewable sources, which are produced through the use of various technologies to be converted into fuels. Biofuels must comply with the quality standards established by the competent authorities.”

The Energy and Mines Commission agreed to hold a public hearing in the district of Villa Trompeteros, Loreto region, on Friday, November 18 of this year.

APUS OF VILLA TROMPETEROS DENOUNCE THAT THEY WILL REMAIN WITHOUT ELECTRICITY AND WATER

Indigenous leaders Abner Tomi and Benjamín Amias Andi, president of the Native Communities located in Lot 8 and San Juan Community of the Villa Trompeteros district, Río Corrientes, respectively, came to the Energy Commission and denounced that they have been totally abandoned and neglected, as mining activity has left them with contaminated water and soil. They have no way to survive, they said.

The communal authorities requested the reactivation of oil lot 8 in the short term. The return of 3 million dollars, which PetroPerú undertook to deliver to the liquidating company of Plus Petrol. The company leaves in November and we are left in worse conditions. They leave Lot 8 and we are left in the dark and without water, they said.