Bolivian Tax system - another findSorry guys for for bothering you again but I might have been incorrect as far as the new tax system is concerned. I just found an interview with Mr. Dalence in a Bolivian newspaper that I translated into English (my Spanisch is ok but not sufficient) Please find the most important extract...and the link
https://translate.google.com/translate?u=http%3A%2F%2Fwww.bolivia.com%2Fnoticias%2FAutoNoticias%2FDetalleNoticia34304.asp&langpair=es%7Cen&hl=en&ie=UTF8
"...The authority of Government explained that necessarily they must be modified Mining Complementary Tax (ICM) and the Tax to the Utility of the Companies (IUE) because it is an accreditation that it establishes that if the ICM are paid no longer the IUE pays.
“For example a company anyone must pay 100 dollars by ICM and by IUE it must pay 120 dollars, but single payment 20 dollars, the 100 rest already are credited”, indicated..."
It appears to me that the ICM is to pay in any case and not depending on the cost structure and the profit of the mining company. If the company is successful there is a IUE surplus that will be charged additionally.
To keep my example:
Example with13 US$ price of silver 40%/50% cost quotes and 10% ICM / 25% IUE:
13$ * 0,5 = 6.5$ EBT and 1.30 $ ICM
The 25% IUE from 6.5$ works out to 1.65$, and compared to 1.30$ ICM that will be accounted one would have to pay the difference of 0.35$ IUE all together 1.65$. That equals 25% with the difference that 1.30$ is payable in any case and not depending on cost structure of the particular mining company This would be much more favourable for APE.
At 40% cost-ratio the net profit is 7.80$ with 1.95$ potential IUE tax. This works out to 1.30$ ICM + 0.65$ IUE.
It's getting worse for ineffecient companies - let's assume an 80% cost ratio. At 13$ revenue the companes EBT would be 2.6$ with 0.65$ IUE to pay (25%), this is less than the ICM of 1.30$ but the company won't get a refund and they have to pay the 1.30$ this works out to 50% tax quote(in diesem example 1.3$ / 2.6$ = 50%).
Such tax system rewards effeciency and punishes high cost producers. The Government has a "safe" tax income from mining - applying last years example Bolivia would have received at least 115 mln US$ instead of 45 mln US$ plus the additional IUE tax from the more successful companies.
Discussion highly welcome
Art