RE:Payments to Governments Jumpenin,
Thank you for pointing out that Orvana Minerals is a good corporate citizen and taxpayor in Bolivia, Spain, and Canada.
Your conclusion about greed in Bolivia is incorrect. The reason for the increase in taxes paid is because of EMIPA's increased profits in 2017 and 2018 relative to 2016. The Bolivian income tax rate has been unchanged at 37.5 percent, and Bolivia also collects a mining royalty tax on the revenue generated from copper, gold and silver sales from Don Mario Mine
at rates of 5%, 7% and 6%, respectively.
These items are disclosed on notes 6 and 19 of Orvana's Financial report.
Here are exerpts from the Q4 2017 financial report:
Q4 2017 Financial Report Note 19 Page 25
Income tax rates in Bolivia and Spain remain unchanged from the prior year at 37.5% and 25%, respectively.
For the year ended September 30, 2017 2016
Current income taxes:
Current tax on income for the year $ 4,993 $ 172
Total current income taxes 4,993 172
Deferred income tax:
Origination and reversal of temporary differences in OroValle and EMIPA (1,639) (4,930)
Total deferred tax recoveries (1,639) (4,930)
Total income taxes (recoveries) $ 3,354 $ (4,758)
The tax on the Company’s income before tax differs from the amount that would arise using the Canadian
statutory income tax rate applicable to income of the consolidated entities as follows:
For the year ended September 30, 2017 2016
Loss before income taxes $ (12,201) $ (13,213)
Statutory income tax rates 26.5% 26.5%
Income tax provision calculated using the combined Canadian federal and
provincial statutory income tax rates (3,233) (3,501)
Tax effects of:
Higher foreign tax rates 2,096 271
Non-deductible expenses 1,565 454
Tax deductions (recognized) not recognized 2,926 (1,982)
Income tax expense (recovery) $ 3,354 $ (4,758)
Q4 2017 Financial report Page 30.
(d) Production from Don Mario Mine is subject to a 3% NSR payable quarterly. Royalty expense under this NSR totaled $2,164 for the year ended September 30, 2017 (September, 2016 – $1,225). The Bolivian government collects a mining royalty tax on the revenue generated from copper, gold and silver sales from Don Mario Mineat rates of 5%, 7% and 6%, respectively. These amounts totaled $4,854 for the year ended September 30,
2017 (September 30, 2016 – $2,877).
For 2019, the income tax in Bolivia should be zero, because the YTD loss reported by Don Mario is $1.558 million USD as of the end of FQ3, but Bolivia still collected its mining royalty tax in the amount of $2.533 million dollars for the first 9 months of fiscal 2019, since this tax is collected based on gold, silver, and copper production.