This Friday, April 12, the first transfer was made within the framework of the Royalty Law, for a total of $93 billion, to 307 municipalities in the country. These amounts constitute the largest injection of fresh resources into the municipal financing system in the last 10 years, a historic figure that materializes progress towards greater justice and territorial equality.
The delivery of resources was designed following an agreement between the Government and parliamentarians, which allows the distribution of around 50% of what will be distributed in 2025 when the largest collection of the Mining Royalty is achieved. For this, two Bridge Funds were generated.
The first is the Territorial Equity Fund that will distribute $70,755 million, in 300 communes, with the objective of compensating for the existing budget gaps between the municipalities. The second is the Common Mining Fund that will distribute $22,891 million and is intended to compensate for the externalities of mining activity in 43 communes of the country.
The law determined that the royalty resources received by the municipalities are freely available, although they cannot be used to pay municipal debts. Its use will be determined by the highest communal authority, in agreement with its Municipal Council, based on the most pressing needs that they identify in their territories.
Subsequently, they must inform the Undersecretary of Regional and Administrative Development (Subdere) of the destination of these resources and Subdere, in turn, will inform Congress. This is an opportunity for citizens to learn how the funds were spent and a valuable opportunity to study the impact of this significant contribution.
The Minister of Finance, Mario Marcel recalled that the Royalty Law was the result of a long exercise of dialogue between the Government and political parties, the private sector, academics, local communities and citizens in general. “We managed to agree on a formula that allowed positions to be harmonized: we agreed on a novel way to solve the problem of the tax burden and at the same time we allocated greater resources to the regions and communes, reinforcing decentralization. With these new resources, for example, in the Antofagasta region, the commune of Tocopilla will be able to have the first Construction and Demolition Waste Center, taking care of the environment and giving quality of life to the neighbors,” remarked the Secretary of State.
The Minister of Mining, Aurora Williams, highlighted that “this is a very significant milestone because it materializes the contribution of the mining industry, through Royalty, to the development of the territories and mainly to decentralization. Chile is a mining country and our industry, apart from being one of the main engines of our economy, contributes in a concrete way to the communities throughout the country.”
“Royalty to large-scale mining allows resources to be collected and distributed to the territories that need them most. This injection of resources, which reaches almost 90% of the country’s municipalities, is a historic milestone for our regions and for decentralization. We want to promote local development by providing greater financial autonomy to municipalities and we will continue working together to make this happen. In this way, decisions with greater territorial relevance can be made and the social cohesion of our country promoted,” concluded the Undersecretary of Regional and Administrative Development, Francisca Perales.
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