Impuestos sobre Recursos Naturales). The production tax is a direct tax based on prices set by the Treasury Department and published each month in the official government gazette. It is calculated on the basis of quoted world prices of metals, with certain minor modifications that are made by the tax authorities. To control the production tax, the law establishes (under government supervision) procedures for sampling, weighing, and analyzing metals and ores. The mining company must present the metal to the tax authorities for testing, and the production tax rates vary according to the form in which it is presented. The rate is designed to discourage the export of ores and concentrates by lowering the tax on metals refined in Mexico. The production tax on copper, for example, is always based on the last process applied to the metal within the limits of the Mexican territory. Example of Production Tax Rates Based on Copper Sold at 50 and 60 Cents per Pound* _Tax Rate_ Base at 50 cents/lb. at 60 cents/lb. Refined 5.36% 15.29% 18.61 % Unrefined bars 5.78 15.72 19.03 Concentrates and precipitates 6.22 16.16 19.47 Ore 6.64 16.68 19.89 The production tax is calculated on the basis of the export price above a base figure of 20 cents (U.S. currency) per pound, f.o.b. New York. To obtain the amount of increase in the indicated rates, the difference between the actual price and the 20-cent base price is multiplied by a factor of 0.3312. For example, if the export price is 50 cents, the amount will be: 0.3312 x 30, or 9.936 percent, plus the 5.36 percent base, or a total of 15.296 percent. The tax on refined or electrolytic copper must be paid in specie. Export Tax The export tax is levied directly on exports of all metals and minerals. Various rates (ad valorem and, in some cases, in specie) are assessed in accordance with the type of mineral and the degree of processing of the ore in Mexico. The official list of export taxes is given in Table 8. The basis for taxing copper is the official price of the metal which is based on the average export price quoted on the New York Commodity Exchange during the preceding month less an estimated amount for transportation that would be incurred abroad. For export tax purposes, the official metal prices are published monthly in the official gazette. The formalities in connection with establishing the export tax follow the same procedures for sampling and analysis as the production tax calculations. An example of export taxes on copper follows. * As percent of average monthly export price established by the Treasury Department. 25