Lithium Power International Ltd (fka LTHHF)

[Dr_Vonschellan]

Mining_Royalty hits_Senate brick_wall. No_to 48%cap &_too-short 3yr_term
The Senate wants a Mining Royalty cap much less than 48% and a longer term of 10 years over a way too-short 3 year term. And as far as a leftist/commie outrageous 50% cap goes... well, forgettaboutit from now on.
https://www.latercera.com/pulso/noticia/royalty-minero-gobierno-no-consigue-respaldo-opositor-a-carga-maxima-tributaria-de-48-y-votacion-en-el-senado-se-pospone-para-mayo/FPCTACTGIBBSVKVRG3HWEGD35U/ exactly as we predicted would happen under the very welcomed new President of the Senate Mining Commission Senator Luz Ebensperger on April 10 https://investorshub.advfn.com/boards/read_msg.aspx?message_id=171655128
See a Google English translation below.

Bravo, excellente.

The Doctor
-----------------------
Mining Royalty: Government Fails to Get Opposition Support for Maximum Tax Burden of 48% and Senate Vote Postponed to May
by Victor Guillou

The talks between senators from Chile Vamos and the Treasury failed to bring positions closer to the limit on the payment of taxes for the large mining companies. Different players in the industry stressed their call to set a lower ceiling so as not to affect the competitiveness of the sector in the global mining concert.

An intense day of negotiations took place in the Senate on Tuesday. On the one hand, the government, represented by the Minister of Finance, Mario Marcel, and his undersecretary, Heidi Berner; and on the other, the RN senators, Rodrigo Galilea and Rafael Prohens, and their UDI peers, Juan Antonio Coloma and Javier Macaya, as representatives of the opposition. The conversations sought to approach positions regarding the proposal presented by the Executive in its indications entered on Monday, within the framework of the project that establishes the mining royalty, of a maximum tax burden of 48% for the companies affected by the payment.

However, the negotiations did not achieve their goal, in view of which the parties agreed to extend the talks for at least two more weeks.

Senator Ricardo Lagos Weber (PPD), president of the Finance Commission, where the initiative is located, although he emphasized "the effort that is being made, particularly from the government, to bring positions closer to the opposition," explained that " most likely we will have to process it (the project) in the next two weeks, or eventually after the district week”, scheduled for the first week of May. With this, the initiative would be voted on after the constitutional elections on May 7.

The day of negotiations began first thing in the morning in the Treasury committee of the Upper House. Until there came the Undersecretary of the Treasury, Heidi Berner, who commented with the attendees on the new formula entered via indications.

Berner remarked that in last Tuesday's session "what was discussed was 50%", and that after the conversations held in the last week, they were confident that "there is a willingness to get closer to an agreement", and for this reason the indication entered during the night of this Monday contemplates a lower figure, 48%.

The undersecretary also recognized the "need for this tax burden that occurs with the royalty, not to generate the wrong incentives." Given this, she explained that the indications also propose incentives for the expansion of mining projects. For this, the Executive proposes that the tax rates remain subject to the average production of the last six years.

Thus, a small producer that expands its capacity above 12,000 metric tons of fine copper (TMCF), would be exempt from paying the tax for up to six years, while a medium-sized producer, that exceeds 50,000 TMCF, will maintain that same term payment of ad valorem between 0% and 2%.

In turn, Marcel explained that these points, added to the depreciation incorporated into the mining operating margin and start-up expenses, which are already part of the project, allow that, together, "the combination of these elements make the profitability of an investment project increases significantly”

The indications also seek to make a gesture to the parliamentarians of the regions. For this reason, they propose extending that the direct contribution of the royalty to the mining communes extends for a period of 10 years, from the three years previously established in the project. In this line, the senator of RN, Paulina Núñez, attended the session to raise the need to "find a formula" to prioritize resources to the communes and mining regions.

Another of the points that monopolized the discussion was whether the ad valorem tax would be considered expressly as an expense for determining the operating profitability of the large mining companies, on which the maximum tax burden will operate. In this, despite the explanation given by the tax coordinator of the Treasury, Diego Riquelme, on how the taxes considered as deductible expenses operate, senators José García Ruminot and Ximena Rincón pointed out the need to consign said criterion "expressly, so that they do not there are doubts about it, ”said the ex-militant DC.