MEXICO CITY (Reuters) - Canada’s top mining lobby said on Monday that Mexican lawmakers remain “firm” on approving a system of mining royalty payments, despite the industry’s best efforts to lower a levy that companies say will deter investment.
Mexico’s lower house of Congress approved the new 7.5 percent mining royalty on earnings before interest, taxes, depreciation and amortization earlier this month as part of a plan to bolster the country’s feeble tax haul. The Senate must vote on the wider bill by the end of this week.
“What I‘m hearing is not what I’d like to hear,” Rosalind Wilson, president of the Canadian Chamber of Commerce’s mining task force, said in a telephone interview.
“We are hearing that they are fairly firm,” added Wilson, who said she had met with “dozens” of lawmakers since the royalty was proposed in April.
The royalty proposal is part of a fiscal reform plan by President Enrique Pena Nieto that focuses on reaping more income tax from high earners, closing corporate loopholes and widening the tax base.
But Wilson, whose group represents about 60 firms that dominate Mexico’s mining sector, said she was still holding out hope that lawmakers would reconsider and lower the planned royalty rate.
Mining companies threatened to cut investment in Mexico after the government proposed the royalty, arguing that lower metal prices, rising running costs and higher taxes reduce the country’s investment allure.
Reporting by David Alire Garcia; Editing by Simon Gardner and Kenneth Maxwell