Tax collection sinks 12% in 2023

Tax collection, a very clear reflection of the progress of a country’s economic activity, closed 2023 with a collapse of 12.3%, the National Superintendence of Customs and Tax Administration (Sunat) reported yesterday.

In this way, S/10,530 million less were collected compared to fiscal year 2022. In 2023, the tax revenue of the central government was S/147,246 million.

Fall in GDP and the Congress factor

The drop in tax collection in 2023, explains Sunat, is due to the evolution of economic activity. GDP would have fallen around 0.5% (as anticipated by the Central Reserve Bank), while domestic demand contracted around 1.6%.

Likewise, the collecting entity warns of the negative impact of some regulatory measures such as Law No. 31556, which establishes the temporary special VAT rate of 8% for restaurants, lodgings and hotels until the end of 2024; or Law No. 31903, which allows the free disposal of funds from the withdrawal accounts corresponding to mypes.

Thus, for example, the collection from the general sales tax (IGV) amounted to S/83,444 million during the year 2023. This is almost S/5,000 million compared to the VAT in 2022, which was S/88,444 million .

Possible non-compliance

For economist and PUCP professor José Oscátegui, the fact that tax collection has fallen is bad news for a country that is characterized, in itself, by having a very low tax pressure compared to its peers in the region.

“It is a terrible situation because there will be a lack of income to attend to a series of minimal things in terms of citizen security, health, education or infrastructure construction,” the expert warned.

It is important to point out that this year’s public budget was outlined based on economic scenarios different from those we have today. The figure approved by Congress was S/240,806 million.

“Everything that is budgeted is going to be affected and there will be cuts. Spending is going to be lower and with the existing social problems, the situation can become dangerous for the country because we are not in a position to stop addressing priorities,” Oscátegui stressed.

According to former Minister of Economy and Finance Pedro Francke, the drop in tax revenue comes in a context where Congress “continues to erode and perforate” the treasury; Therefore, it is urgent to raise the tax pressure because 2024 requires—quite apart from the basic recovery of private investment and business confidence—the reactivation of public investment to face the onslaught of El Niño and the rebound agenda.

Collection: out of 12 months, it only grew in one

In all of 2203, tax collection only achieved progress in February, when it increased by 2.3%. In this way, tax revenues have accumulated 10 consecutive months in free fall.

According to Sunat, the lower income from the collection corresponding to the regularization campaign for fiscal year 2022, which was paid in 2023, has also taken its toll.

The fall was mitigated by the lower tax refunds made during 2023, which decreased 12.2% compared to 2022.

It doesn’t take flight. As a consequence of a recessionary economy, the country’s income has not looked blue for 10 months. “Some regulatory measures by Congress impacted revenue collection.”