Identifier
Created
Classification
Origin
07LAPAZ1008
2007-04-12 11:56:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy La Paz
Cable title:
NEW MINING TAX PROPOSAL ON THE TABLE
how-toVZCZCXYZ0000 RR RUEHWEB DE RUEHLP #1008 1021156 ZNR UUUUU ZZH R 121156Z APR 07 FM AMEMBASSY LA PAZ TO RUEHC/SECSTATE WASHDC 3146 INFO RUEHAC/AMEMBASSY ASUNCION 6691 RUEHBO/AMEMBASSY BOGOTA 4016 RUEHBR/AMEMBASSY BRASILIA 7905 RUEHBU/AMEMBASSY BUENOS AIRES 5155 RUEHCV/AMEMBASSY CARACAS 2385 RUEHPE/AMEMBASSY LIMA 2507 RUEHMD/AMEMBASSY MADRID 3410 RUEHMN/AMEMBASSY MONTEVIDEO 4533 RUEHNE/AMEMBASSY NEW DELHI 0117 RUEHQT/AMEMBASSY QUITO 5024 RUEHSG/AMEMBASSY SANTIAGO 9611 RUEHKO/AMEMBASSY TOKYO 0294 RUEHUB/USINT HAVANA 0253 RHMFIUU/HQ USSOUTHCOM MIAMI FL RUMIAAA/USCINCSO MIAMI FL RUCPDOC/DEPT OF COMMERCE WASHINGTON DC RUEATRS/DEPT OF TREASURY WASHINGTON DC RUEHC/DEPT OF INTERIOR WASHINGTON DC RUEHC/DEPT OF LABOR WASHINGTON DC RHEHNSC/NSC WASHINGTON DC
UNCLAS LA PAZ 001008
SIPDIS
SENSITIVE
SIPDIS
STATE FOR WHA/AND LPETRONI
COMMERCE FOR JANGLIN
TREASURY FOR SGOOCH
E.O. 12958: N/A
TAGS: EMIN EINV ECON PREL PGOV BL
SUBJECT: NEW MINING TAX PROPOSAL ON THE TABLE
REF: LA PAZ 137
UNCLAS LA PAZ 001008
SIPDIS
SENSITIVE
SIPDIS
STATE FOR WHA/AND LPETRONI
COMMERCE FOR JANGLIN
TREASURY FOR SGOOCH
E.O. 12958: N/A
TAGS: EMIN EINV ECON PREL PGOV BL
SUBJECT: NEW MINING TAX PROPOSAL ON THE TABLE
REF: LA PAZ 137
1. (SBU) According to U.S. mining company executives, a new
tax proposal is on the table. Coeur d'Alene Vice President
Jim Duff told Econoff April 3 that GOB officials are
considering maintaining the existing complementary mining tax
while eliminating its creditability against income taxes; the
latter would occur only when mineral prices rise above
certain established levels (for silver, the rate could
potentially be set at $6/ounce). Duff added that the GOB is
also considering the introduction of a 10 percent special
income tax, in addition to existing income taxes of 25
percent; for metallic elements like silver, the special tax
rate could potentially be just 8 percent.
2. (SBU) Duff declared the new proposal "very encouraging,"
largely because it leaves unchanged key components of the
industry's existing tax structure, which companies generally
support. Duff added that Minister of the Presidency Juan
Ramon Quintana and other GOB officials reiterated promises to
consult with mining companies and other stakeholders before
introducing significant tax changes. Apex Silver executives
told the DCM April 10 that they had received similar
assurances; they noted, however, that the GOB does not always
honor its promises.
3. (SBU) Comment: If the GOB is indeed considering a proposal
of this sort, it marks a substantial departure from earlier
calls for tough across-the-board tax hikes (reftel). Company
executives expressed satisfaction with the GOB's more
accommodating stance but noted that final resolution could be
weeks or months away; in the meantime, they have other
concerns, including the proposed elimination of exporters'
ability to collect refunds for value-added taxes and import
duties. The GOB's attitude may have shifted slightly, but
for mining companies, the investment climate remains as
uncertain as ever. End comment.
GOLDBERG
SIPDIS
SENSITIVE
SIPDIS
STATE FOR WHA/AND LPETRONI
COMMERCE FOR JANGLIN
TREASURY FOR SGOOCH
E.O. 12958: N/A
TAGS: EMIN EINV ECON PREL PGOV BL
SUBJECT: NEW MINING TAX PROPOSAL ON THE TABLE
REF: LA PAZ 137
1. (SBU) According to U.S. mining company executives, a new
tax proposal is on the table. Coeur d'Alene Vice President
Jim Duff told Econoff April 3 that GOB officials are
considering maintaining the existing complementary mining tax
while eliminating its creditability against income taxes; the
latter would occur only when mineral prices rise above
certain established levels (for silver, the rate could
potentially be set at $6/ounce). Duff added that the GOB is
also considering the introduction of a 10 percent special
income tax, in addition to existing income taxes of 25
percent; for metallic elements like silver, the special tax
rate could potentially be just 8 percent.
2. (SBU) Duff declared the new proposal "very encouraging,"
largely because it leaves unchanged key components of the
industry's existing tax structure, which companies generally
support. Duff added that Minister of the Presidency Juan
Ramon Quintana and other GOB officials reiterated promises to
consult with mining companies and other stakeholders before
introducing significant tax changes. Apex Silver executives
told the DCM April 10 that they had received similar
assurances; they noted, however, that the GOB does not always
honor its promises.
3. (SBU) Comment: If the GOB is indeed considering a proposal
of this sort, it marks a substantial departure from earlier
calls for tough across-the-board tax hikes (reftel). Company
executives expressed satisfaction with the GOB's more
accommodating stance but noted that final resolution could be
weeks or months away; in the meantime, they have other
concerns, including the proposed elimination of exporters'
ability to collect refunds for value-added taxes and import
duties. The GOB's attitude may have shifted slightly, but
for mining companies, the investment climate remains as
uncertain as ever. End comment.
GOLDBERG