ACM COLOMBIAN MINING SECTOR DEVELOPMENT 2018 2022 8 23 Taxes A study carried out by EY in 2012 concerning the state participation in coal and gold mining projects for a selection of mining countries shows Colombia as the second country with the highest tax burden for coal and gold projects after Indonesia and in the rst place for underground gold mining situation that was probably worsened after the 2016 tax reform that includes taxes to the dividends among other taxes that impacted the sector At the same time ACM has identied that the mining GT may exceed 75 in almost all scenarios and in some cases depending on price behavior is close or may even surpass 100 Since tax burdens is one of the main criteria when making decisions to invest in a country it is essential to think about a competitive model to face tax schemes of countries with which we compete and that may allow to recover the mining investment These are some of the proposals regarding the main taxes paid by the sector and other taxes in connection with opera tion competitiveness 231 Income Tax The income tax fee for this year 2017 is one of the highest in the world and with the transition regime established by the past tax reform Act 1819 2016 a lower fee 33 shall only exist after 2019 Since the average fee on income in the OECD countries is 24 we suggest the fee on income be reduced to levels near 25 to compete with Chile and Peru which are the main mining countries in the region GOLD C OAL TAX BURDEN RANKING FOR MINING PROJECTS Source EY In d one si a C o l o mb i a 1 In d ones i a In d on e s i a 1 Co l o mb i a I n d o nesi a 2 Colombi a Colombi a 2 Ar g enti n a A r g e nt i n a 3 Argenti n a Argen t i n a 3 Pe r u P e r u 4 Austral i a Austral i a 4 Au s tra li a A u s t rali a 5 Pe r u Pe r u 5 Ch il e C h il e 6 Ch i l e Ch i l e 6 Ca n ad a C a n a d a 7 Ca n ad a Ca n ad a 7 South Africa South Africa 8 South Africa South Africa 8 Open sky Underground Open sky Underground EY 2012 Comparative analysis of state participation in gold and coal mines in Colombia This is not a reality exclusively of the mining sector According to Consejo Privado de Competitividad Colombia does not have an equitable progressive or efcient tax system The current system is excessively complex and punishes investment and employment Also according to Doing Business Rep ort Colombia has one of the highest worlds effective tax fees 698 and has place 182 out of 191 countries in Latin America it is only surpas sed by Argentina and Bolivia