Finnish Government proposes a new mining tax
On September 9th, the Finnish Government came to a political agreement on a new tax on mining operations. According to the agreement, the mining tax would come into force on 1st of January 2023.
The tax will be drafted for the Parliament during 2022. Therefore, more detailed information about the basis of the tax assessment is not available.
A report published by the Prime Minister’s Office discussed two types of taxes on production – volume-based and value-based royalties. It also assessed two types of taxes on the net income of mines – tax on profit and tax on economic rent. (“Examination and comparison of optional models for a mine tax”. Prime Minister´s Office 2021:44)
In public discussion “Net smelter return” type of tax has also been mentioned.
The government’s goal is to collect approximately EUR 25 million in tax revenue annually. A substantial part of that revenue, more than half, will be addressed to the local municipalities.
A wave of amendments
Several other important regulatory reforms concerning the mining industry will also be seen in the coming months.
- Mining Act Amendment. At least the reservation mechanism will be reformed. The main argument is that the current mechanism creates uncertainty for landowners and local businesses. The current proposal also includes a veto right of the local municipalities (provisions will be made to give municipal authorities the right to decide through land use planning whether it is possible to carry out mining activities in the municipality).
- Nature Conservation legislation. The Ministry of the Environment has started the process to reform the nature conservation legislation. A proposal of new NoGo area is included.
- The Land Use and Building Act concerning the use of land areas and building activities is also in progress.
Finnish Mining Association is closely following further developments and strives to bring out the perspectives of the industry. We’ll keep members of FinnMin informed during the process.