Saki Bigio: “I think we can raise marginal taxes [a los ricos en el Perú]”

The first week of February 2023, the International Monetary Fund (IMF) pointed out that Latin America and the Caribbean will face an increase in poverty and food insecurity in 2023, and trust in governments will remain low as long as corruption remains high and the rich do not pay their fair share in taxes. On the last point, they specified that they should not necessarily pay higher taxes, but that better ways of curbing tax evasion and legal loopholes should be applied.

“I think so, I think we can raise marginal taxes [a los ricos en el Perú]”, affirmed the Peruvian economist Saki Bigio in an interview with The Republic. He added that taxes are low and also the size of the government is low.

“I would suspect so. [hay evasión] (…), but there is evasion at the level of all income. Yes, it is a country where taxes are low and the size of government is small. That is something that, for example, Hugo Ñopo also says. In particular, during the pandemic there were bigger equity problems because, especially for the poorest groups, the main source of income is work. While for other groups it is capital or income,” Bigio commented.

Data

• Peru is one of the countries with the highest rate of tax evasion in the region. 50% of the income tax (IR) and 30% of the General Sales Tax (IGV) are lost due to evasion and avoidance, which in total represents 8% of the GDP that is lost each year, according to economist Armando Mendoza.
• In addition, Peru is the fourth most unequal country in the world, followed by Mexico and the Dominican Republic, since 1% of the population of each country accounts for between 25% and 30% of total income, according to the Latinometrics analysis. based on the Global Inequality Report 2022.