Economy Commission approves the reduction to 8% of VAT for hairdressers and beauty salons

Last Wednesday, the Congressional Economic Commission approved the opinion that seeks the reduction of VAT to 8% for beauty centers and hairdressers. Currently, these taxes are recorded at 18%. According to data from the National Superintendency of Tax Administration (Sunat), nearly 5,300 companies are registered in this area. According to its main promoters, the aim is to promote formality in the sector, as well as its reactivation after the COVID-19 pandemic.

The vote included the bills of congressmen José Pazo of Somos Perú and Eduardo Castillo of Fuerza Popular. Last year, both presented the opinions 4450/2022-CR and the 6611/2023-CRrespectively, which were included in the opinion titled ‘Law that promotes a special tax regime called cut
tax for companies dedicated to hairdressing and other beauty treatments’. The next step is the scheduling of its debate and vote in the plenary session of Congress.

Reduction of VAT in beauty items was sought from 2023

The presentation of this bill occurred in December of last year. Eduardo Castillocongressman of Popular Forcewas the first promoter for the opinion to be discussed in the economy commission of the Congress; However, he remained in custody. At the time, the Peruvian Association of Beauty Entrepreneurs (APEB) He stated that 10% of his sector could go bankrupt due to the delays of the pandemic. This was due to the loss of jobs, mostly in small and medium-sized companies. According to association data, The sector went from 90,000 beauty salons to almost 50,000 throughout the country.

On the other hand, the bill 4450/2022-CR, presented by José Pazo from Somos Perú, seeks to rescue the businesses of SMEs and Mypes in the beauty sector. Like the previous project, it justifies this measure with the cases of those businesses that were affected after the pandemic, political crisis and other economic conditions in the country. The bill presented on Wednesday united both proposals and seeks to maintain this measure permanently.

Tax reduction for hairdressers and beauty salons would join that of restaurants and hotels

As recalled, the Government of Pedro Castillo enacted law 31556 in 2022. This legal norm sought to benefit micro and small businesses in the hotels, accommodations and restaurants sector, and will be valid until December 31, 2024. Currently, these companies benefit from the reduction of the General Sales Tax (IGV)that It went from 18% to 8%.

At the time, the parliamentarians who supported the measure indicated that the reduction of the VAT It would help competitiveness in this sector, and provide greater accessibility in its formalization. At the time of promulgating the rule, the Ministry of Economy and Finance indicated that it did not agree with the rule approved by Congress. The Minister of Economy of the Government of Pedro Castillo, Oscar Graham, pointed out that the rule only benefited less than half of the businesses in the country, that is, the largest. The former head of MEF He clarified that, of 62,000 businesses, the majority did not pay VAT as they were within the Single Simplified Regime (RUS), in which they already pay less taxes.