The tax collections for the concept of the mining taxes could be defined as the lifeline for the Dominican Government’s income during 2025. Four tax figures linked to that sector registered a growth of 209.7% last year, driven mainly by the increase in gold prices.
ANDl price of gold ounce It rose in price by almost $3,000 over the last year, an increase that, according to international analysts, was driven by the global uncertainty caused by the policies of the president of the United States, Donald Trump.
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This increase in the cost of the gold metal benefited the public finances of the Dominican Republic, through the increase in income received by the General Directorate of Internal Revenue from income tax (ISR), net smelting return (RNF), participation in net profits (PUN) and the minimum annual tax (IMA).
A tax expert consulted by Diario Libre explained how the treasury managed to take advantage of the increase in gold prices to increase their income from the second amendment to the Special Lease Agreement of Mining Rights (CEAM), signed between the company Old Town Dominican Corporation (PVDC) and the Dominican state.
The types of taxes
The company must pay 3.2% of RNF each month, as a result of the gross salewhich is established only gold and silver. Then you pay 25% ISR on the net result, to this tax, because it is a mining industrysome accounting adjustments are made, as detailed by the consultant, who clarified that the rate is due to the 2001 Tax Code, when the initial contract was signed.
These two tax commitments are followed by the PUN, which is a payment of a rate of 28.75% for net cash flows. Both the participation tax on net profits like the ISR are paid quarterly, although they are settled annually, he noted.
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“Then there is the IMA, which as of 2017 changed and is not 100% of that estimate, but 90 percent. That is, if Barrick said in its financial model approved by the Government that it was going to pay 100 of IMA, rent and PUN and only paid 80 (%), then the IMA has to be 10 to reach 90 of that estimate,” the expert said.
He argued that the payments to the treasury that the mining company are linked to gold price“so while the price is high, more will always be raised. In short, I believe that it is a balanced contract“.
According to a document shared by the economist Henry Hebradthis year the contract with the company Old Town would represent income for the coffers of 31,151.2 million pesos from the different taxes that must be paid, an amount that in 2025 was 27,501.9 million pesos, which would imply an absolute increase of 3,649.3 million.
Economists think
The economist Henry Hebrard He assured that until now the State is not stopping receiving money due to poor application of the contract with the mining company. Old Town Dominican.
“He Dominican state is receiving more money because prices are rising gold prices. Yes Now, if the contract was not like that, one could propose renegotiation,” said Hebrard.
Meanwhile, the professor and economist Francisco Tavarezdeclared that the mining taxes They are applied to the company’s financial result, which may be affected by production costs.
“Evidently, if the gold price goes up, the result regarding income and profits It’s going to improve, as was seen this past year,” he said.
