Tax avoidance and tax collection in Peruvian mining sector

Abstract

The existence of avoidance mechanisms related to transfer prices in the mining sector has a millionaire impact on tax collection, due to the exploitation of loopholes in the regulations by mining companies and their related companies in order not to pay taxes. The purpose of this study is to provide solutions that help increase collection without affecting investments. With the present investigation of applied type and correlational design, it is demonstrated, through statistical data obtained from reliable sources, that the payment of income tax by companies belonging to the mining sector is unjustifiably low, despite the tax benefits. granted by the central government. On the other hand, entrepreneurs in the manufacturing sector, despite the fact that the current indiscriminate policies of trade liberalization have led them to face unequal competition with products coming in from abroad, contribute three times more to the treasury. In this sense, the need arises for the Peruvian government to negotiate with mining entrepreneurs, promote royalty rates that are graduated progressively according to their returns in order to reduce uncertainty in their investments in exchange for them opting for a legal economy during their tax planning.