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Tata Steel says higher taxes, regulatory oversight discourage global miners from coming to India

 

Date | June 20, 2019:

he mining sector in India faces the highest tax rates in the world and a very tight regulatory environment. Global mining companies, which have a lot of exploration capability, would not invest if they do not get the benefits of exploration, which involves a lot of risk capital, said TV Narendran, managing director and chief executive officer, Tata Steel.

 

The Mines and Minerals (Development and Regulation) (MMDR) act has kept exploration limited to government companies only, whereas, globally, it is also open to the private sector, added Narendran.

 

Regulatory oversight has increased in India due to cases of unsustainable mining and some of the bad practices, said Narendran. But it penalises good miners and bad miners altogether.

 

“The regulatory environment needs to factor in good practices across the world. We need to recalibrate to what is good for the long-term of the country, recalibrate to more stable pricing of commodities and recalibrate to take into account the learnings that we have from other countries,” he said. A lot of regulation has come against the backdrop of high commodity prices and bringing in transparency, he added.

 

Narendran further said the effective tax rate for the mining sector in India is around 60-64 percent, which is amongst the highest in the world. “We should bring down the effective tax rate in mining which includes royalty, many other direct and indirect taxes," he said. "We need to open up exploration for the private sector in a manner that they are encouraged to invest capital and get the benefits of taking the risk.”

 

 

(Source: https://www.cnbctv18.com/)