By Marco Aquino

LIMA (Reuters – Peru’s left-wing government is yet to determine how to raise taxes in the mining sector. Finance Minister Pedro Francke stated on Thursday that Peru’s right-wing government still has not decided exactly what it would do. He also said that International Monetary Fund advisors may take several weeks to make recommendations.

Francke stated that while we will keep the existing types of tax, Francke said to reporters that he plans to alter some rates.

Francke requested last month that Congress authorise the executive to change the tax system. However, the government did not provide details about how much tax would be increased on miners. Peru is the No. 2 producer of mining products in the world. Peru is the world’s No. 2 miner.

Pedro Castillo of the left wants to raise taxes for funding new social programs. Congress has yet not voted on the tax package, so it’s unclear whether they will. The Peruvian government requested the IMF’s advice on how to reform mining taxes.

The government claims it will increase taxes, but not affect competitiveness. However, on Thursday, the National Society of Mining, Oil and Energy said that any rise in take would be detrimental to competitiveness.

Raul Jacob (SNMPE President) stated in a statement that the government was trying to reverse a tax system which already benefits them. Jacob also serves as chief financial officer of Southern Copper Corp (NYSE:) Corp., Peru’s largest producer. The red metal is produced by the No. 2 manufacturer.

Under the current tax system, which assumes metal prices stay high, the group estimated that the mining sector would have to pay an additional 85 billion soles or $22.12 billion in taxes by 2026. This figure is 2.5 times more than what industry paid over the previous five years, according to estimates.

Francke stated that Francke understood there could be divergent opinions on the topic and added that IMF advisers were “the most reliable source” to help make decision on the matter.

($1 = 4.0663 soles