The Chargé in Bolivia ( Adam ) to the Secretary of State
[Received June 20—9:29 a.m.]
Sir: I have the honor to refer to the Embassy’s telegram no. 510 of June 7, 194672 relative to the action of the Minister of Hacienda73 in waiving all taxes on a base price for tin over and above US$0.62½ per pound of fine tin exported from Bolivia …
It appears that the Bolivian negotiators in Washington have had some indication to the effect that a better price than US$0.62½ per pound of fine tin might be paid provided the producers would receive the full benefit of such additional price. This waiver of taxes is the Bolivian Government’s contribution to the negotiations for a better price than US$0.62½. It is suggested by the Assistant Minister of Hacienda, Sr. Palenque, that it would be practically impossible to export a larger quantity than the average of exports to the United States for 1944 and 1945 which, he states, were approximately 21,612 metric tons, and that therefore the offer of a bonus for larger exports during this year than this average is meaningless. The Ministry is suggesting that the basis for a bonus be 16,000 metric tons and that the premium of one-fourth cent for each five percent of exports over and above 16,000 tons up to a total premium of one cent for a twenty percent increase be maintained. The Assistant Minister is also hopeful that in addition to arriving at the basis for a bonus of 16,000 tons that the price before the payment of the bonus will be increased over and above US$0.62½ per pound, in view of the Ministry’s waiver of taxes on such price and such bonuses as may be obtained over and above US$0.62½.
The waiver of taxes in fact only would apply to a price over and above US$0.63½ instead of US$0.62½. It has been the practice of the Government to base its taxes on the c.i.f. price and when the contract price was changed in 1942 to f.o.b. Chilean or Peruvian ports the Government estimated the difference between f.o.b. and c.i.f. at US$0.1½ per pound and added this amount to the f.o.b. price before applying the tax. It will be noted in the attached letters that the Government intends to continue to apply the taxes on a c.i.f. price basis.[Page 390]
The taxes which the Government offers to waive amount to approximately 20% of the value.*
American Commercial Attaché