Legislators in Brazil are expected to advance with a 4 percent royalty tax proposal for local miners. A media report from Brazil’s Valor said Senator Marcus Pestana changed the formula to calculate the tax local iron ore producers pay the government in order to please city mayors.
Pestana proposed to reduce the amount of money that will go the federal government as a way to increase revenues for cities, and has proposed to set a 4 percent iron ore royalty rate, which would increase from the current rate of 2 percent.
The Valor media report said the rate would likely raise to 4 percent and should only reduce to 2 percent in specific cases, depending on the individual demands of smaller producers, as a way to not harm them.
Pestana rejected the initial government proposal, which set increasing rates from 2 to 4 percent, depending on the commodity’s price fluctuation in global markets. Pestana said Brazil charges one of the world’s cheapest iron ore rate taxes.