Congress blocks taxes on large mining companies

With 96 votes in favor, 18 against and one abstention, the plenary session of Congress yesterday granted the Executive partial powers in tax, fiscal, financial and economic reactivation matters. The term it will have will be 90 days, despite the fact that 120 were requested.

The project was supported by Fuerza Popular, Acción Popular, Alianza para el Progreso, Avanza País, Renovación Popular, Podemos Peru. While Together for Peru voted against. Meanwhile, the ruling party of Peru Libre voted divided (17 in favor and 13 against).

The proposed tax reform aimed to generate an additional collection of S / 12,000 million, however, by excluding various measures, it would only be possible to have income of less than S / 1,000 million.

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The excluded

The replacement text does not include all the proposals of the Executive, since the measures that would allow generating a higher collection are excluded.

In detail, the Executive is prevented from making changes to the mining tax regime despite the fact that the price of metals reached its peak and will generate surpluses for companies in the sector. It should be mentioned that the International Monetary Fund (IMF) pointed out that Peru has room to increase the mining tax burden without affecting competitiveness.

Nor will you be able to raise the income tax (IR) for individuals who earn more than S / 300,000 per year.

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The rental tax or capital income may not be raised by the Executive. The simplification of the small business tax system will also not be implemented.

Nor has it even been authorized to establish a mechanism for digital platforms such as Netflix, Spotify pay VAT in the country.

The president of the Constitution Commission, Patricia JuarezHe pointed out that the Executive must present bills of each excluded proposal to be evaluated and debated in Parliament.

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“Currently we are going through problems of social conflict, especially in mining, it is not necessary to deliver them and we call on the Minister of Economy to immediately present his bills that we are willing to debate quickly so that they can be approved for get more resources, “said Juárez.

In this regard, the head of the Ministry of Economy and Finance (MEF), Pedro FranckeHe indicated that although a part of the proposed measures was approved, from his office they will work in greater detail with the Congress of the Republic so that a consensus is reached on the pending issues of the tax reform.

“We reiterate the importance of a tax reform that increases formalization and collects more from those who can do it, so we will present the bills to be discussed in the next legislature,” said the official.

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Tax disputes will be expedited

The Executive may issue legislative decrees to expedite the resolution of tax disputes. Criteria will be established to determine when there is a complex controversy.

It may also implement measures that fight against tax avoidance and evasion. In addition, the forestry, aquaculture and wildlife sectors will have tax benefits.

Executive may create tax profiles.