Between 2000 and 2020, the average tax burden in Peru was between 14% and 15% of Gross Domestic Product (GDP), being one of the lowest in Latin America. This low level has caused the State not to obtain the income that it should achieve.
César Flores, economist and member of CooperAcción, pointed out that if Peru would have a minimum tax burden of 18% of GDP in recent years, the country would have achieved an additional collection of S / 252,000 million.
“The inaction of the last governments and ministers of Economy have left us without an additional tax collection of S / 252,000 million”, expressed Flores during the presentation of the study “Tax Reform in the mining sector”, developed by the Tax Justice Group.
Given these fewer resources received in recent years, the expert mentioned that a tax reform is urgently needed in Peru, as it has been postponed by several governments.
“These are not dogmatic or political issues, they are technical issues. Painfully, Peru is in the last locations of the countries with the lowest tax collection ”, he limited.
Flores even points out that due to the low income of the State, spending on education and health is not the most appropriate.
In this sense, the economist indicated that to meet health and education goals it is necessary to increase collection by 5.2 points. In other words, a tax burden of at least 19.6% of GDP is needed.
For his part, José Távara, professor of Economics at the PUCP, acknowledged that there is a “fiscally rickety State”, which prevents the country from developing.
“Having a fiscally weak state is not a good business, in the end it is more expensive for us and we have to go into debt, as has happened,” he added.
Mining tax regime
The tax contribution of the mining sector has been 1.3% of GDP on average in the last decade. However, when there is a metal price supercycle, the contribution rises, according to CooperAcción.
“In periods of supercycles this improves and mining can contribute 2% or 2.5% of GDP,” said Flores.
In this sense, since mineral prices have risen, the economist considers that it is necessary for the mining sector make a greater contribution, as the companies would have extraordinary income of US $ 13,000 million.
Given this, he recommended that the tax burden of the mining sector be raised between 4 and 5 points in the next five years.
Peru and a pending tax reform
César Flores recalls that Peru has been the only country in the Pacific Alliance that did not apply a structural tax reform in the last 10 years.
“While the collection was reducing, other countries such as Chile, Colombia, Mexico, carried out various structural tax reforms, on the other hand, Peru was the only one to abstain from it. And that is the explanation why we are in the last places in what is tax collection in the region, “said the expert.
Due to the fact that a tax reform has not been carried out, the distance of Peru’s tax pressure compared to the Latin American average is 7 points of GDP, and with OECD countries it is 18 points.
The data
Impact. Tax reform proposed by the MEF would allow generating an additional collection of S / 12,000 million per year.
Input. The average participation of the mining in internal taxes it is 16.41%.
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