Pension for consumption will bring taxes to the pockets of the AFPs

The consumption pension, adhered to the pension reform of Fujimori, aims to bring the money that Sunat would capture through the VAT into the pockets of the AFPs, warns Noelia Bernal, professor of Economics and researcher at the University of the Pacific.

According to the opinion – approved in the first vote in Congress and pending the second on June 5 – the Private Pension System (SPP) will be in charge of the special accounts. Even if you belong to the ONP, you will have to open one in the private regime. The text allows the AFPs to charge a commission for managing the savings.

This consumption pension will consist of 1% of annual purchases, which will be extracted from the establishments’ electronic sales receipts. The transactions from which the VAT will be collected cannot be greater than S/700. In annual terms, it should not exceed 8 UIT (S/41,200). It does not apply to the acquisition of equipment, vehicles and machinery.

Bernal explains that the State will no longer have that money from VAT collection and that instead of being invested in public goods or social programs it will be a lifeline for the AFPs.

“It is basically a monetary transfer. A program aimed at high-income workers. Accounts will be created that will be managed by the AFPs. A new business to save them because a lot of money has gone with the withdrawals,” he noted for La República.

Congresswoman Sigrid Bazán, for her part, maintains that with 1% of the limit of S/41,200 per year in purchases, the contribution to the pension fund will be S/412 per year —or S/34 per month. He considers that the system “only offers crumbs and not a decent pension or real reform.”

Pure makeup

More than a reform, what is being done is to consolidate the system of AFPwhich has already failed not only in Peru but in the world, emphasizes Álvaro Vidal, professor at the PUCP Law School.

“The only thing that explains the insistence of this model is that there is a business behind it and that the congressmen are unfortunately being complicit in it. It is not a fundamental reform. It is simply making up what already exists,” she said.

In Vidal’s opinion, for good pensions to exist there must also be contributions from companies and the public. State. This reform charges retirement savings only to the worker and the state apparatus, and in a country with “such low incomes,” it is impossible to achieve good pensions.

In that line, Bernal alleges that this reform does not have any solidarity approach because “solidarity means serving the most vulnerable.” with resources that come from taxes from the richest and that is not being seen.”

Both conclude that, with this measure, it is most likely that many workers will want to switch to the private AFP system – and eventually, also to financial and insurance entities, according to the opinion – and that would further weaken the SNP.

“Accounts are being created that do not guarantee public financing and do not recognize solidarity financing. The pensions of the national system, which are already low today, will be affected,” concludes Vidal.

Independents obliged to contribute

The reform includes a progressive withholding from 2% in the first year, increasing one point every two years up to 5%, with the aim that everyone can access a pension. This would apply from the third year after the law was published.

Vidal does not consider it viable because the income level of independents is lower than that of dependents. Furthermore, the presence of informal workers – almost 90% of mypes, according to Sunat – makes the task difficult.

Reaction

Noelia Bernal, professor and researcher at UP

“A program aimed at high-income workers. Accounts will be created that will be managed by the AFPs. A new business to save them because a lot of money has gone with the withdrawals.”