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Collection slows down in line with GDP growth

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In the national month, tax collection almost did not grow and advanced just 0.1% compared to July 2021; while the income accumulated between January and July registered an advance of 16.3%, informed the Sunat.

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Regarding the collection of July, the collection entity indicates that the negative impact came from the impacts generated “both by the application of Supreme Decree No. 068-2022-EF, which excludes fuels with less than 95 octane and diesel from the list of goods to which the ISC is applied; as by the application of Law No. 31452, which exempts a group of products from the family consumption basket from the VAT.

Indeed, the ISC in July fell by 30.2% and it does so by 10.1% during the first 7 months; meanwhile, the IGV advanced a timid 4.3% and 9.4%, in July and from January to July, respectively.

economic slowdown

One fact that David Bravo, a partner at EBS Abogados, warns about is the monthly drop in income tax collection (IR) by 6.9%, a fact that would be associated with the drop in company sales. “And this occurs because there is a lower purchasing power of the population and a rise in prices,” stressed the tax attorney.

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The IR, explained Bravo, is a monthly payment on account of the sales of the companies; therefore, the only explanation for its recent drop is that it is selling less.

In this Sunat itself pays, because within the reasons for the slight progress in collection it points to “the lower monthly growth rates of the economy, a trend that would have been maintained during the month of June, whose tax obligations are declared and paid mainly in July”.

In this sense, the downward trend of economic progress that has been dragging on in the last three months (March, April and May) would be confirmed. The official forecast of the Executive is that this year the GDP will grow by 3.6%.

Exonerations did not cause prices to fall

In the opinion of David Bravo, the low collection is linked to a slowdown in the economy and not to tax measures.

“The tax exemption on some products did not generate price decreases. There was no real impact,” the expert noted.

As of July this year, inflation stands at 8.74% in metropolitan Lima, while the consumer price index is at 9.28% nationwide.

Infographic-The Republic

Source: Larepublica

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