Lithium Power International Ltd (fka LTHHF)

[Dr_Vonschellan]

Boric_wants 50%_max tax_on miners_after he_ripsourballs off_and
gets his leftist/commie sadist buddies to shove them up our bum https://www.latercera.com/pulso/noticia/royalty-gobierno-propone-establecer-un-carga-maxima-tributaria-de-50-para-las-mineras/XK2W5GLG4NDSBJF4F4PWFDGUIU/
English translation below.

The Doctor
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Royalty: Government proposes to establish a maximum tax burden of 50% for mining companies
by Patricia Saint John

The Minister of Finance, Mario Marcel, explained that, if this percentage is exceeded, the reduction would be made through the specific tax on the mining sector.

The Minister of Finance, Mario Marcel, announced this Tuesday before the Senate Finance Commission, the indications that the government hopes to present to the mining royalty project.

According to the Executive's proposal, the idea is to establish a maximum potential tax burden of 50% for mining companies, on operational profitability, jointly considering the royalty, the first category tax, and the final taxes (additional tax) that would have been paid if shareholders distribute 100% of the profits.

In this way, it is considered that if the sum of all these taxes exceeds this maximum potential charge, it is the royalty that will be adjusted to set it at 50%.
Government postpones entry of indications to the mining royalty and privileges search in agreement with the opposition
Minister of Mining and Royalty: "We do not want to repeat what happened with the tax reform"

Although the proposal to establish a maximum charge was well received by opposition senators Juan Antonio Coloma (UDI) and Rojo Edwards (Republican Party), in both cases they argued that the established percentage is too high and could affect investment. In fact, Edwards presented an indication that sets the maximum amount of taxes paid by mining companies at 40%.

In response, Marcel maintained that "regarding the maximum load point, the reason why we have been presenting those charts with maximum load alternatives is because we are willing to seek an agreement around those figures."

He also indicated that "we are available to have a conversation and to reach more precise agreements regarding where the collection of the royalty that will not go to municipalities and regions would be invested."

The president of the Finance Commission, Ricardo Lagos Weber, said that his objective is to reach an agreement this week so that said body can vote on the indications and dispatch the project from the Senate Chamber next Tuesday.
Collection and payment of taxes

Marcel affirmed if this 50% limit were introduced and also if the incorporation of start-up expenses are added within the operating margin, the collection figures in the regime would be for the concept of greater collection due to a change in taxation (royalty) 0.41% of GDP, higher collection due to an increase in production of 0.22% of GDP and lower collection due to an increase in costs 0.07%, which adds up to a higher collection of large private mining of 0.56% of GDP.

Regarding the effective payment of taxes, he indicated that the proposed design reduces the potential tax burden in scenarios of low and high prices.

This is because, as he argued, when the price is low, the ad valorem tax increases the tax payment as a percentage of the business's profitability and when the price is high, the company is subject to a higher tax burden due to the rates of the component over the margin.

In addition, he indicated, the potential tax burden is on average less than its maximum value because prices are variable, and because there are deductions from the tax base.

In this way, he cited as an example that if it is assumed that three copper price cycles are repeated (readjusted for inflation) like those of the last 10 years. Thus, the margins vary from year to year, combining years of high and low margins. The average price is US$3.78 per pound (close to the reference price of US$3.74). In addition, accelerated depreciation reduces income tax payments during the first years of project operation. Using these prices from the last 10 years, the potential tax burden is 42.8%

As long as a price of US$4.50 per pound is assumed. The lower payment of taxes in the first years due to the effect of accelerated depreciation prevents the maximum potential load condition from being met for several years. At this constant price of US$4.50 per pound for 25 years, the potential tax burden of the project is 46.2%

And assuming a price of US$3.50 per pound, the potential tax burden remains below 50%, while at a constant price of US$2.10 per pound for 25 years, the project's potential tax burden is 40.5%