Argentina eliminates mining taxes | World News |Axisoflogic.com

Argentine President Mauricio Macri announces the elimination of retention taxes on mining during an event in San Juan, Argentina, Feb. 12, 2016. | Photo: Argentine Presidency

In a move set to greatly benefit transnational mining companies, Argentine President Mauricio Macri decreed Friday the elimination of the retention taxes on mining activities in the country.

"Today retention taxes on mining exports are finished," said Macri from the province of San Juan, at the foot of the Argentine Andes.

Macri added that his government intends to increase the amount of transnational mining projects in Argentina in order to bring in greater foreign investment.

“We are going to work together with the governors (of the provinces) to develop new projects, always putting care for the environment first;” said Macri.

The president did not specify what measures would be taken to mitigate the impact of mining on the environment. Large-scale mining projects, like those preferred by transnational companies, are considered one of the most environmentally harmful extraction activities.

Representatives of mining interests told Telam that they welcomed the decision, saying it would represent an 8 percent drop in production costs and would increase their competitiveness in the region.

The move will adversely affect the government's coffers. This past year the Argentine federal government collected US$223 million through retention taxes on mining.

The elimination of taxes on mining was met with criticism almost immediately.

Daniel Tomas, a lawmaker with the opposition Front for Victory, took to social media after Macri's announcement to condemn the decision.

“If I need to choose between reducing the retention taxes on multinational mining companies and universal allowance, pensions, and public works in municipalities, I'll stick with the latter,” Tomas wrote on his Facebook account.

Tomas was the head of the mining commission of the lower house of the Argentine congress until last year.

Macri's decree eliminates only the federal retention taxes. Mining companies will still need to pay royalties to the provincial governments where they operate, as well as other taxes and customs.

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