Increasing the ISC would generate a 4.5% drop in annual winery sales, according to CCL experts

If the Ministry of Economy and Finance (MEF) decided to adjust the fixed amounts of the Selective Consumption Tax (ISC) to inflation in 2022 and 2023, the annual sales of wineries could fall by 4.5%. This was warned by tax lawyer Leonardo López, partner of Hernández y Cía. Lawyers.

The also president of the Tax Commission of the Lima Chamber of Commerce (CCL) considered that an alternative that would reduce the impact of the ISC adjustment on businesses would be to consider inflation only for 2023, as well as establish a limit.

“This limit could be defined by the average between the minimum and maximum of the inflation target range defined by the Central Reserve Bank (BCR) for each year,” said López. “This formula could even be adopted as a constant rule, which would give predictability to the market,” he indicated.

As is known, the MEF has until January 30 to decide whether or not to increase the fixed amounts of the ISC, and, if it does, it can also determine the extent of the adjustment.

To make a decision, the MEF considers the inflation of Metropolitan Lima, which in 2022 was 8.56% and in 2023 it was 3.41%. It should be noted that the BCR’s target range for the last year was 1% to 3%.

This situation has generated the expectation of unions of winemakers, restaurants and SMEs, among representatives of other sectors, who fear an increase in the ISC that will affect their businesses.

Would increasing the ISC affect pisco sales?

For Leonardo López, adjusting the ISC to the inflation of 2022 and 2023 would not only affect the economic recovery but also smaller businesses, which would see the sales of products taxed with said tax contract, such as cigarettes, beers and alcoholic beverages. , among them the flagship drink: pisco.

“In the face of recessionary cycles, countercyclical measures must be adopted, one of which is not to increase tax burdens, since they may end up discouraging investments and the reactivation of the economy,” explained the tax lawyer.

Regarding a possible adjustment of the ISC, the Minister of Economy and Finance, Alex Contreras, said a few days ago: “We are evaluating it. There is a significant delay (of the fixed amount of the tax in relation to inflation). In practical terms, the load has been reduced, but we are evaluating it. We do not want to affect the reactivation. We will also communicate this at the time.”

In this regard, Leonardo López considered it a relief to hear Minister Contreras say that the decision that the MEF will make will not affect the economic reactivation that is expected to be promoted in 2024.