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Current Trends in Mining Taxation in Bolivia

Fernando Aguirre B., International Mining Law and Investment in Latin America and the Caribbean (2005)

1. General Background.- As part of a new economic policy introduced in Bolivia in 1985, a complete reform of the country's taxation system was put in place by means of Law No. 843 of May 20, 1986. This law substituted a complex and inefficient tax system in effect until then characterized by hundreds of different rules and taxes and a weak administrative structure. The basic focus of the reform was simplification. Seven new general taxes substituted the old ones to which three other taxes and three special regimes were later on introduced. By law 1606 of December 20, 1994 the original law 843 was partly modified and is the basis of what is today the general taxation system in effect.

Law 843 also created a so called “surtax” on extractive activities of non renewable natural resources (hydrocarbons and mining), which was modified by Law 1731 of November 25, 1996.

By law No. 1777 of March 17 1997 a new Mining Code was approved which created an additional so called “complementary tax for mining”, governed by this Code.

The general taxation system currently comprises:

1) Added Value Tax, on local sale of goods and services;

2) Additional Added Value Tax, on personal income of a Bolivian source;

3) Tax on Company's Profits;

4) Transactions tax, as a special tax on gross income which can be credited against the Company's