Concerns over tax increases grow in Brazil as new mining law is proposed

Mining companies and market experts in Brazil are worried that a series of changes proposed to the country’s mining laws would result in increased taxation and higher research costs.

A package of three presidential decrees issued on July 25 this year included an update to the country’s legal framework for mining and significant increases in the CFEM, a tax applied to mining revenues – also known as royalties. “The increase in mining costs is the most important outcome of these changes,” Valdir Farias said. Farias is ceo at Fioito Consultoria, a consultancy firm specialising in mining taxes. “The main change is in the CFEM,” Pedro Henrique Jardim, a lawyer with consultancy Machado Meyer, added. The tax rate on iron ore, for instance, would vary from 2% to 4% depending on international prices, compared with a previous flat rate of 2%. Also, royalties for niobium would increase to 3% from the current rate of 2%; gold royalties would rise to 2% from 1%; while the rate for diamonds would go from 2% to 3%. But the royalties for mining goods used in construction would...

Published

Ana Paula Camargo

Felipe Peroni

Danielle Assalve

August 17, 2017

18:00 GMT

São Paulo