Mining Companies Do Not Evade Taxes: CAMIMEXBy Fernando Mares | Mon, 06/27/2022 - 14:55
The Mexican Mining Chamber (CAMIMEX) declared that its members do not evade taxes. Instead, the chamber stated that sector is one of Mexico’s largest taxpayers. The statement comes after the Mexican Tax Authority (SAT) released a study where the mining and baking sectors are accused of tax evasion.
On June 16, 2022, SAT published a study conducted by the Autonomous University of Coahuila (UAC) where mining companies are pointed out as possible tax evaders. According to SAT, over 26 national and foreign companies allegedly evaded the payment of US$955 million of income taxes (ISR), which represents 32 percent of contributions from large taxpayers, excluding the national oil company PEMEX. “This supposed tax evasion has been detected when mining companies register investments in extraction as expenses or the reclassification of expenses, with the aim to increase their deductions,” SAT stated.
CAMIMEX rejected the accusation, arguing that the sector is one of the largest tax contributors in the country and supports Mexico’s economic reactivation. The chamber reported that according to the Ministry of Finance, the industry has paid more than US$12 billion in taxes and other fees over the past 7 years. The extractive sectors, which consist of mining, oil and gas, account for 83 percent of ISR contributions.
According to CAMIMEX, mining companies paid over US$3.2 billion in 2021, with an increase of over 124 percent for their ISR payments on the back of higher metal prices globally. The chamber also quoted a comparative study carried out by PricewaterhouseCoopers (PwC), which shows mining companies have a tax burden of 52 percent. Therefore, Mexico’s taxation is bigger than the one in Peru with 39.9 percent, Chile with 35.6 percent, Ontario, Canada with 34.6 percent and Arizona, US with 30 percent.
The chamber argues that the sector brings further benefits to communities since it creates jobs, invests in infrastructure and supports the development of remote communities where mining activities are developed. “The affiliated mining industry endorses its commitment to keep boosting the economic recovery of Mexico and to be an agent of change, creating wellbeing for all Mexicans,” CAMIMEX said.
CAMIMEX stated that SAT has efficient tax processes to avoid tax evasion and regrets the diffusion of studies “based on suppositions.” The chamber urged UAC to analyze the information provided by the chamber, which comes from official sources.