Challenge towards OECD: advance tax axis and competition

The President of the Republic, Pedro Castillo, pointed out that Peru remains firm in its aspiration to become a member of the Organization for Economic Cooperation and Development (OECD).

Through a letter sent to the Secretary General of the OECD, Mathias Cormann, the president expressed his commitment to continue implementing public policies that improve the living conditions of all citizens, as well as mitigate the negative effects of the pandemic of the COVID-19.

Luis Miguel Castilla, former head of the Ministry of Economy and Finance (MEF), welcomed that the current administration wants to continue with its agenda towards the OECD. Given that, Despite the fact that our country began this process several years ago, it has not been possible to implement all the recommendations that the agency gave at the time.

“Where more progress has been made has been in international cooperation in tax matters, and many of the policies that the MEF is carrying out are part of that effort, in the fight against avoidance and evasion,” Castilla explained.

At the end of 2014, Peru had its Country Program, a roadmap recommended by the OECD so that the minimum requirements for incorporation are met.

Some of the axes focused on public governance, anti-corruption and transparency; human capital and productivity; and environment.

However, the arrival of the pandemic has also made it difficult for Peru to meet its objectives.

The fact is that the OECD emphasized the great informality that exists in the country, which is why it was a problem that had to be solved.

“Achieving high formality involves improving the employability of the workforce and that involves achieving a better match between the educational offer at a higher technical-technological level with the needs of the market,” added the former minister.

Improve competition

The OECD recommendations also emphasize the matter of free competition.

In this sense, Indecopi reported that it implemented 80% of the suggestions, the most relevant was Law 31112 that establishes the Prior Control of Business Concentration Operations.

For Santiago Dávila, partner of EA Consultores, there are still pending recommendations that the institution must implement, such as preparing binding reports on the conditions of competition in the markets so that public institutions can make reforms so that there is greater competition.

“They are not reports that seek to sanction companies, but rather reports that seek to identify what is happening so that these markets do not function competitively and how to improve them. The other thing the OECD says is that these recommendations have to be implemented by other public institutions ”, Davila pointed out.

Increase tax pressure by combating tax avoidance

Luis Miguel Castilla, Former Minister of Economy, said that one of the main problems that Peru has is the high level of tax non-compliance, so avoidance and evasion must be fought.

“The approved norms are, like the general anti-circumvention norm, which has a dissuasive effect to discourage circumvention,” added Castilla Rubio.

It is important to mention that the OECD It is made up of 38 member countries, from North and South America to Europe and Asia-Pacific.

The last countries to join the OECD were Colombia, in 2020, and Costa Rica, in 2021.

The word

Luis Miguel Castilla, former Minister of Economy

“There would be a lack of progress on issues of transparency, open and electronic government and generally improving governance within the public sector, where there are still many challenges.”