ACM COLOMBIAN MINING SECTOR DEVELOPMENT 2018 2022 11 PRESENT VALUE OF THE ROYALTIES AND SPECIAL TAXES TO MINING BY YEAR 2015 IN MILLION PESOS Source Perry 2017 REGIME COAL NICKEL GOLD Colo m b i a Effective Collection Simulation Act 756 of 2002 1 70 2 9 1 9 4 1 3 2 65 1 2 2 3 784 3 6 3 1 773 4 8 Pe r u With contract Without contract 2 8 2 0 1 4 3 3 9 6 2 6 8 9 2 0 2 3 6 5 6 2 6 2 5 9 5 3 1 1 1 3 0 6 1 3 49 8 4 Chi l e Exact application of the Chilean regime Application under assumption that companies are big 2 74 9 8 2 2 2 9 2 04 4 0 2 4 5 1 1 8 5 87 6 7 3 1 1 3 7 2 9 A study carried out for the Association by Guillermo Perry this year concludes that the system that Colom bia has for the payment of royalties is uncompetitive compared to the models of other mining countries of the region such as Peru and Chile It highlights that for example Canada Peru Chile and recently Argentina have migrated to a royaltys scheme that taxes mining companies according to protability levels and does not depend as it currently happens in Colombia exclusively on the production levels Perry in the study stablishes various models to estima te the contribution by royalties in coal gold and nickel under 5 scenarios The current Colombian model the two Peruvian models with or without legal stability and the two Chilean models large and medium com pany In all the scenarios a similar trend is shown about the payment for royalties that varies with the behavior of the international prices although with a basic difference in the current Colombian scenario compared to the models of Peru and Chile The nominal payment level with the Colombian model is much greater than the regimes of the other countries in particular in the coal extraction partly due because in the low prices time a gap is opened in the payment of royalties in the Colom bian model compared to other models where under the Colombian regime an important contribution of royal ties is caused in spite of the fact that no prots are Perry 2017 Mining and oil royalties towards an efcient design Regarding mining costs it is important to migrate to a competitive model of energy collection which signi cantly impacts the operation costs Likewise prices and overruns for taxes on fuels which are the ones using the main raw material of the industry should be revised and the taxes on this input affect the mining sector more than proportionally than what happens in other sectors Finally we call for a revision of taxes on formal hiring which today are located within the mining tax burden in the rst lines according to the Private Competitiveness Council in this country taxes on salaries contribute to 186 of the prots while in Ecuador and Peru the rate is 137 and 11 respectively and in other countries like Chile and South Africa it barely reaches 4 24 Royalties Mining royalties present today two conditions that should be reviewed in order to look for a model which will allow to solve three situations i royalties have higher rates that in other competing countries of mining capital ii the change in the distribution of royalties have affected the political social interest for mining projects and iii provide legal certainty to the deductibility of royalties To migrate to a truly competitive royalties system a balance of the tax burden according to the evolution of the different mining projects and the beha vior of the international prices should be sought in such a way that it contributes to the recovery of the invest ment and establishes staggered contributions according to the protability of each mining project