Ideas for Improving Mineral Taxation in Latin America and the Caribbean: Opportunities for Sustainable Development

Mining represents one of the primary sources of revenue, tax receipts, sustainable development, and productive transformation for Latin America and the Caribbean. However, policies governing taxation within the mining sector are often inefficient and inequitable, thereby diminishing both investment and public revenue collection. Governments tend to set tax rates and royalty payments without considering the investment incentives facing mining companies. Similarly, they often allocate exploitation rights through non-competitive processes that constrain economic efficiency and limit the State's potential revenue. This document presents a set of principles and proposals aimed at improving fiscal management within the region's mining sector. First, it proposes that tax systems be designed based on criteria of efficiency, progressivity, and stability, ensuring that the rents generated by mining contribute to economic development without discouraging private investment. Second, it recommends strengthening competitive and transparent bidding mechanisms for the allocation of mining rights, with the aim of maximizing both extractive activity and public revenue while minimizing discretionary decision-making. Finally, it underscores the importance of implementing royalty regimes and progressive profit-sharing schemes that automatically adjust to mineral price cycles, thereby fostering greater fiscal stability and predictability for investors. Collectively, these proposals seek to contribute to the modernization of fiscal institutions within the mining sector and to the construction of a tax framework capable of translating mineral wealth into sustainable and inclusive development for the region.