Micro and small businesses (mypes) in the restaurants, lodging and hotel sectors will pay less in the general sales tax (IGV) for more than two years, after the Executive Branch enacted Law No. 31556, which reduces from 18% to 8% VAT to promote its economic recovery.
This relief in the tax burden —approved in the Congress— It will be in force from September 1 of this year until December 31, 2024. It will also benefit the mypes dedicated to catering and food concessionaires (see infographic).
Effect on employment and competition
The VAT reduction will make small restaurants more competitive and will even encourage their formalization for the good of the sector and the fiscal health of the country “despite the misinformation from the Ministry of Economy and Finance,” according to José Silva Martinot, spokesman for the Union of Restaurant Guilds of Peru.
Silva Martinot explains that an impediment to being formalized is that in the common system 18% of VAT must be charged on sale, since products and labor are exempt from this tax.
“One and a half million people, between direct and indirect, have lost their jobs in the gastronomic sector. We hope this will help encourage more restaurants to hire people. With this rule, many will be encouraged to reopen, ”he noted.
For his part, Carlos Canales, president of the National Chamber of Tourism (Canatur), forecasts that the recovery of formal employment in the sector will be 30%.
However, he considers that, after this first step, it should also aim to reduce the VAT in travel agencies and tax organization, as well as the suspension of the temporary tax on net assets (ITAN) because “it is confiscatory to pay it despite to not having the income stream to justify their payment.”
Why was the MEF opposed?
In the management of Oscar Graham in the FEMthis ministry rejected the initiative alleging that, of the 114,000 taxpayers registered Sunat in this area during 2021, more than 50% (62,000 businesses) did not pay VAT because they were registered in the Single Simplified Regime (RUS), which targets the little ones.
Therefore, the Peruvian Foreign Trade Society (Comex) maintains that, considering the 200,000 companies that make up these items, the benefit would go in the opposite direction, benefiting only the majority of companies that do pay VAT, that is, the large ones.
A separate chapter, according to the MEF forecast, the fiscal cost would be S/690 million, and the tax system would also be distorted, “business dwarfism”, informality and even incentives for false taxation would be encouraged.
A neutral position is taken by Blanca Chávez, president of the Association of Hotels, Restaurants and Allied (Now Peru), since she recognizes that only the big chains will gain from the tax reduction; however, she also believes that she will be an incentive for the mypes in the RUS to formalize.
Final prices for the consumer will not fall
Focus by Francisco Pantigoso, tax lawyer
This law that lowers the IGV to 8% for mypes that do not form a business group will create a harmful mismatch in the IGV because for purchases by citizens it will continue to be 18%. There will be ten points of difference between the fiscal debit (sales) and the fiscal credit (purchases), and Since the repayment of this credit is not foreseen —as happens with exporters—, it is foreseeable that the employer will have to recover the aforementioned mismatch by not lowering the prices of the services he offers.
I believe that it is an anti-technical measure that favors elusive dwarfism, and that reminds us of the effects of the recent VAT exemption that was applied to chicken, bread and other foods in the basic family basket to curb inflation, although the price never reached reflect a true decline.
It will serve to alleviate the high costs
According to entrepreneur Angel Urpeque, owner of the Bolívar restaurant in Pueblo Libre, the law will help businesses catch up on their taxes and better manage their income and expenses when hiring staff; although, he assures that the measure should be permanent and not temporary.
In addition, remember that the inputs remain through the roof, to the point that the 20-liter bucket of oil went from S/156 to S/218; the sack of rice from S / 162 to S / 200. “It’s about recovering employment, and with this 8% alternative you not only recover customers to maintain your prices, but also hire more staff to cover tables,” he noted.
José Silva Martinot, spokesperson Union Guilds Restaurants
“I think it will be a boost for the sector. We hope it will help more restaurants feel incentivized to hire people. With this rule many will be encouraged to reopen “
Carlos Canales, president of Canatur
“It is better late than never. With a tax framework in which there is a lot of evasion, if they lower your IGV, there is no longer any point in evading; on the contrary, it encourages the formalization of small businesses”.
Radiography of companies in the restaurant subsector in recent years