Income does not increase in April and MEF prepares tax amnesty

The Ministry of Economy and Finance (MEF) anticipated the meager progress in collection in April and presented, days before the official Sunat report, a legislative reform project to divide and grant special discounts to the debts that taxpayers maintain with the Peruvian state.

In the fourth month of the year, the Government’s official income amounted to S/17,620 million, 4% more than in April 2023, but which rounds out an accumulated drop since January of -6.3% compared to the first quarter of the previous year. .

Furthermore, these S/54,973 million for the first four months of 2024 are almost 10% lower than the S/60,859 million for the same period in 2022. Collection does not increase.

In detail, Sunat explains that the slight improvement compared to March is the result of an evolution of economic activity that allowed more VAT to be collected, as well as an increase in imported goods (11.5%).

There are also “significant extraordinary income obtained from Sunat shares”, which total almost S/1,000 million compared to S/600 million in April 2023. Among them are the S/746 million that were charged to Telefónica for a debt of 20 years.

The day before, Superintendent Gerardo López revealed before the Congressional Oversight Commission that the debt of large companies in Peru today amounts to S/28,325 million, and 87% is contested.

The MEF strategy

As part of the request for legislative powers, Minister José Arista has proposed a “special” discount and fractionation plan for debts as of December 31, 2023. He assures that there is “a large volume of debt that cannot be collected,” especially at the level of the Tax Court, and that Sunat does not have the “resources” to audit.

The plan is to grant a discount if the payment of the debts is in cash, in terms of the components “other than the unpaid and advance payment.” In the case of installment payments, a Discount Bonus is granted (on interest, inflation, fines and respective interest and updates), depending on the level of debt.

Luis Arias Minaya, former head of Sunat, warns that this is the first time that powers have been requested to grant a tax amnesty, a mechanism that “disincentivizes compliance because it rewards the defaulter, to the detriment of those who pay on time.”

In this sense, the specialist points out that it is a “desperate measure” to increase collection, after “allowing multiple exonerations to be granted.”

“To be successful, an amnesty requires a Government with a certain credibility, something this one does not have. We have a government whose president only wants to last in office, and it is Congress that makes economic policy,” says Arias.

For the taxman Miguel Carrillo, the plan could lead to the fulfillment of the debt because it gives a maximum period to pay of 6 to 10 years, after payment of 5% of it. Currently, the term is generally 72 months.

Another no small detail for Carrillo is that a “special fractionation” interest rate lower than those regulated by the Tax Code is established. Today the rate applied for default interest is 0.9% monthly or 0.3% daily.

Furthermore, it states that the rule does not cover debts that are subject to execution by Sunat or with a payment mandate. But debt could be accepted in coercive collection that has not been blocked with precautionary measures, such as embargoes in the form of registration, bank retention, among others.

Reactions

Luis Arias Minaya, former head of Sunat

“Collection has fallen for the second consecutive year, comparing the January-April period, despite the fact that the economy shows a slight improvement. If Telefónica was not charged, it would have been worse.”

Miguel Carrillo, tax lawyer

“The special division has to do with other aspects of the project, because it is also proposed to reduce the deadlines for resolving before Sunat (9 months) and appeal in the Tax Court (12 months).”