A policymaker at the lower house of Brazil’s Congress has proposed an increase in the Brazilian mining tax, known as CFEM, as part of a nation’s tax reform bill, which is currently being discussed in Brazil, a media report by InfoMoney said.
Chamber of Deputies’ member, Celso Sabino, proposed increasing the CFEM tax from 4 percent to 5.5 percent. Sabino’s proposal suggests that all revenues coming from the CFEM tax should stay at both state and city levels. Currently, the Brazilian government takes 10 percent of the CFEM tax and shares the remaining with the other government levels.
Market analysts said the increased tax should have a marginal impact in companies like Vale and Brazilian steelmaker Companhia Siderurgica Nacional (CSN), which owns an iron ore company, CSN Mineração.
“We don’t think the increased mining royalties proposal will change investment cases for Vale and CSN Mineração,” an analyst at Morgan Stanley said.