Financing pensions with the IGV would generate a fiscal cost of almost S/11,000 million

In total, there are seven legislative proposals analyzed by the Ministry of Economy and Finance (MEF) that include some mechanism to direct resources from the General Sales Tax (IGV) to pension funds and that generate high fiscal costs. And from a technical point of view, it does not benefit the majority of the population, according to officials from the office of Jirón Junín explained yesterday in the Economy Commission of the Congress of the Republic.

It is not the way

The congresswoman and president of said working group, Rosangella Barbarán, has presented a bill to reform the Peruvian pension system, which includes feeding the capitalization accounts with 3% of the IGV for consumption by natural persons, in addition to creating the solidarity fund of pensions in which legal entities can contribute 1% of this tax. These measures could generate a fiscal cost of S/10,056 million per year, according to MEF estimates.

According to this portfolio, the money collected from the IGV is not from consumption itself, but from the transaction. That is, if a company makes sales for S/1,000 and purchases for S/600, both amounts would have to be reduced by 18%, which results in S/72. That is the sum that is finally collected through companies and not from individuals.

Another observation that was made is that the proposals contravene article 79 of the Political Constitution of Peru by creating a tax with predetermined purposes, to which the congressman Carlos Anderson (not grouped) noted that “if article 79 is a problem, we change it.”

The problem of regression

“The IGV is the most regressive tax we have. It is the most effective to collect, without a doubt, but if we want to benefit and use it for social security purposes, what we are going to do is benefit the largest deciles, who probably do not need because they already have their own savings”, explained the Vice Minister of Economy, Zósimo Pichihua, during his presentation. He added that this does not mean that tax instruments cannot be used as part of the reform, but the IGV is not the appropriate mechanism.

In this way, the richest 10% would receive 50 times more funds than the poorest 10%, they specified.

For her part, the director of the Directorate of Economic Intelligence and Tax Optimization of the MEF, Miriam Yepes, explained that, of the seven projects presented, in no case had the fiscal costNor is it taken into account that the IGV cannot be capitalized or made profitable. Likewise, there is no tax credit for natural persons, so it cannot be distributed or directed to finance pensions.

“There is also an issue, Peru unfortunately is a country with a high tax noncompliance, both IGV and income tax. This implies, for example, that not all transactions where one pays the IGV are transactions that the State receives because there are false operations, there are subjects without operational capacity, taxpayer delinquencies,” warned Yepes.

Finally, Barbarán emphasized that the State’s money actually belongs to the taxpayers, Therefore, the MEF must better manage these resources and promote formality.

reactions

Miryam Yepes, Director at the MEF

“We are going to take resources from the State, which today are used for education, health, and we are going to use them to finance pension funds that will mainly benefit people with higher incomes.”

Rosangella Barbarán, Pdta. Economy Commission

“(The MEF) has a short-term view that you are the owners of the money and that you invest super well. And that a measure like this is going to affect us. Currently, no point of the IGV goes to pensions.