Bolivia's Congress raises mining taxes

By Eduardo Garcia

LA PAZ, Nov 23 (Reuters) - Bolivia's Congress approved a reform to the mining tax code late on Friday that will substantially increase taxes on mining companies operating in the South American country.

Mining ministry spokesman Alfredo Zaconeta told Reuters the reform means mining companies will have to pay 37.5 percent of their income to the Bolivian state, up from 25 percent in the past.

The decision will affect several major global mining companies working in Bolivia, including U.S.-based Apex Silver Mines Ltd. (SIL.A: Quote, Profile, Research, Stock Buzz) and Coeur d'Alene Mines Corp. (CDM.TO: Quote, Profile, Research, Stock Buzz) (CDE.N: Quote, Profile, Research, Stock Buzz).

The tax reform also broadens the scope of the Complementary Mining Tax (CMT) -- which acts like a royalty -- to include minerals that currently do not pay the levy, like indium and wolfram.

Zaconeta said the royalty tax will be directly proportional to the price of the mineral in the international market.

Currently, it ranges from 1 percent to 10 percent.

The reform also aims to close a legal loophole that grants miners hefty discounts on income tax payments, Zaconeta said.

After taking office as the country's first president of indigenous descent in January 2006, leftist President Evo Morales drastically raised taxes on natural gas operations and nationalized reserves of the fuel.