Congress proposes exempting staple foods, such as eggs and bread, from IGV

Congressman José Jerí Oré, from we are peruhas proposed to exceptionally exempt the main products of the basic family basket from the General Sales Tax (IGV) in favor of the departments, provinces and districts that have been declared in a state of emergency in order to mitigate the negative impact brought about by heavy rains and mudslides.

“The sale and transaction of food contains a General Sales Tax (IGV), if we seek a benefit such as exemption from this type of tariff, we promote food security and access to healthy and nutritious food for the entire population, especially for the most vulnerable sectors”, is stated in the document.

PL 4801, presented this Wednesday, April 26, establishes a 0% VAT rate for the following products that make up the basic family basket: rice, canned fish, pork, beef and poultry, eggs, sugar, lentils, wheat, pasta, bread and mineral water.

Regarding the validity, the measure would apply for 45 days from the day after its publication in the newspaper El Peruano, as well as one day after the declaration of emergency due to natural disasters in any region, province or district of the country. . The measure could be extended only once and for a maximum period of 30 days through a supreme decree issued by the Ministry of Economy and Finance (MEF).

If the measure is approved, the MEF would have 20 business days to publish the regulations. For their part, Sunat and Indecopi must monitor and evaluate the sale prices to the final consumer. The legislative initiative must still go through the evaluation of the congressional commissions before reaching the plenary session for debate and voting.

Informality prevents the most vulnerable from benefiting

It should be remembered that from May to July 2022 the IGV exemption was in force for five products in the basic basket; however, the measure did not have the desired impact, which was to alleviate family economies due to the high price of food, reason why the Government decided not to extend it.

For example, Enrique Castellanos, a professor of Economics at the Universidad del Pacífico, pointed out that the impact on the final prices of food It would be minimal because the rise in prices is a global phenomenon and the informality that exists in the market for these products.

“In fact, there will be a decrease, but you will not see the 18% reflected in the prices. The impact that will be felt will not be much, it is a palliative within a global trend that is difficult to weigh”, he commented at the time.