With the aim that Peruvians can retire and have a good quality of life, there has been discussion about what reforms the pension system needs. The Congressional Economy Commission was scheduled to debate, last Thursday, April 25, an opinion that accumulates several projects, one of them proposes a new way of contributing to pensions: through taxes. However, the issue could not be discussed due to the lack of a quorum of the members of said commission, as well as the absence of the head of Economy, Jose Arista.
The bill, proposed by Fuerza Popular and other Congressional groups, was called Consumption Pension and seeks to allow citizens, through the purchases they make on a daily basis, to accumulate money for their pension. To do this, 1% of the sum of the value of the payment vouchers will be allocated to your funds. In other words, the money would not be paid by the buyer or the seller, but by the State at the cost of lower revenue (VAT).
The Republic consulted with experts to analyze the viability of the multiparty proposal. The responses were not encouraging, since they indicate that this measure would be worse than the initial problem by having direct interference in the already weak collection of fiscal resources.
Fuerza Popular: what is the proposal that promotes the pension reform about?
The opinion presented to the Congressional Economy Commission includes the projects of several groups, with the aim of reforming the pension system. The document informs that, of all purchases made by the person and that are registered by electronic ticket, 1% of the amount paid in taxes may be allocated to contribute to the pension system. This value could reach an annual maximum of S/61,800, that is, 12 UIT.
The project indicates that it is necessary for all contributors to have an Individual Capitalization Account (CIC) in the AFPs, so that they can save in this new system. In other words, those who already have a CIC will be able to place their daily contributions in these accounts. The detail is in those people who are within the National Pension Systemsince they would have to open a new account in the private system.
Consumption pension: will it help collect pensions more efficiently?
The specialists interviewed agree that a new pension systemin order to establish adequate amounts that are not only useful for subsistence, like those offered now.
In addition, they confirm that the project would not generate enough money to create a pension fund minimum or, even, that generate distribution quotas greater than those generated by the private pension funds. Below, we give you more details about why experts prefer to scrap this project.
Measure would harm the State’s tax collection
The measure promoted by Popular Force raises new concerns, given that it could directly affect state coffers. For Gonzalo Llosa, professor of economics and researcher at the Universidad del Pacífico, raising pensions as a VAT discount “can unbalance tax collection, even if the measure is restricted only to those who do not contribute.” He adds that another option would be to add it to the VAT, but that would evidently be a less attractive initiative.
For his part, Carlos Adrianzén, economist and doctor in Administration and Business from the Polytechnic University of Catalonia, highlights that people do not have money to be deducted: “People do not have money for you to take taxes from, because of Sunat there is no left.” In this context, the economist also explains that the country’s tax pressure is at its limit and that with “the income of Peruvians there is too much tax pressure on the formal ones.”
The consumption pension does not guarantee a decent retirement
Professor and researcher Llosa explains that with this bill the contribution made to the pension fund It would only be a percentage of private consumption subject to VAT. This means that “the contribution would be substantially lower than that obtained from 10% of the gross salary, with the exception of times when durable goods are purchased (the value of which may exceed the monthly income).”
Along the same lines, Adrianzén emphasizes that, if this type of collection is carried out, “the retirement will not be enough at all”, since the contributions would be small amounts. “With that scheme I would only collect a minimum portion, a deception. The idea is good, but it doesn’t solve the problem because it doesn’t allow you to have a real retirement.”
The initiative would make the process of raising money difficult
Renzo Vidal, university professor and director of the Journal of Economic and Financial Analysis of the Professional School of Economics of the University of San Martín de Porres, points out that one of the obstacles that this proposal faces is the great informality that exists in the country. As recalled, the rule aims to take a part of the taxes debited in the payment of goods and services during a day, so these businesses should necessarily issue an electronic ticket.
Furthermore, according to Vidal, the rule does not contemplate that a large number of essential products are not recorded with the VAT; Therefore, it would not add to the Individual Capitalization Account, despite being an indispensable part of the budgets of Peruvian families.
Likewise, Vidal specifies that he does not see it convenient for the State to be an important figure again in the event that the norm promoted by Popular Forcesince it would be in charge of managing the income destined for these new Pension fundsas it is still linked to tax collection.
“I wouldn’t see this issue as very viable. It is very cumbersome to withdraw from an account, where you are contributing, because you contribute directly to the State, because it is going to collect taxes from you (through the VAT). (Then) these funds will be transferred to individual sources… There is something there that is not fully conceived, emphasizes the economist.
What did Keiko Fujimori say?
The leader of Fuerza Popular, Keiko Fujimori, expressed her discontent towards the Minister of Economy and Finance, José Arista, for his absence in the recent session of the Congressional Economy Commission, in which the prediction of the bill focused on in the reform of the Peruvian pension system. “It is regrettable to confirm, once again, that José Arista is boycotting a true reform of the system so that 20 million Peruvians can have a decent pension,” Fujimori lamented.
Source: Larepublica
Alia is a professional author and journalist, working at 247 news agency. She writes on various topics from economy news to general interest pieces, providing readers with relevant and informative content. With years of experience, she brings a unique perspective and in-depth analysis to her work.
