MEF: the pending agenda that could resume

After seven months with Pedro Francke at the head of the Ministry of Economy and Finance (FEM), last Tuesday President Pedro Castillo made the first change in said office and appointed Oscar Graham as the new head of the portfolio.

In that sense, they remained pending reforms and short-term measures by the MEF, among which the tax reform stands out, which Francke was unable to fully implement due to Congress’s refusal to request legislative powers. Thus, it would be waiting for the current minister Graham to insist on these changes and, as planned, present specific bills for debate in plenary.

Among the main issues to be finalized are the changes to the mining tax regime, which seeks to tax more companies that are benefiting from the rise in mineral prices and that would allow additional collection of S/ 1,200 million per year.

In addition, the increase in the income tax rate for those who earn more than S / 300,000 per year, and the collection of VAT from digital platforms were pending.

Of the powers granted, the financial chapter was approved, which seeks to strengthen the Banco de la Nación so that it grants loans to mypes and beneficiaries of social programs. But the decrees are still pending publication.

Another pending reform is that of the pension system, which according to the first declarations of the Government would form a new commission between the Executive Power, the Legislative Power and the pensioners. To date, no initiative along these lines has been presented; however, in Congress they installed a working group to look at the problems of ONP members.

It should be noted that When Oscar Graham was General Director of Financial and Private Pension Markets, he supported the MEF’s proposal for pension reform on several occasions. “The main objectives are basically the expansion of coverage, better pensions, sustainability of the new scheme and an additional issue in Peru is the articulation of the systems,” said the official in 2021.

Minimum salary and bonuses

The MEF is also involved in the debate and preparation of the new formula for raising the minimum wage, which would be finalized this year.

In the Francke administration, one of the mechanisms aimed at the most vulnerable population was to apply economic support such as Yanapay of S/ 350 for families with fewer resources, and the bonus of S/ 210 for formal workers with lower incomes. It remains to be seen whether the new minister will maintain that line.

Fonavi: consensus for the return

Another of the pending issues that Minister Graham will have to assume is to present a proposal to seek consensus with Congress regarding the return of Fonavi contributions.

And it is that on Friday, February 11, the deadline for the Executive to observe or promulgate the autograph recently approved by Parliament expires. And according to former minister Pedro Francke, the government’s position would be not to promulgate it because “it significantly unbalances the stability of public finances.”

However, he noted that They will seek a consensus with Congress to find another alternative that solves the demands of the Fonavistas.

progress should be continued

Approach by: José Oscátegui, professor at PUCP

It is a very big loss for the Government to have let Pedro Francke resign, his management has been very good.

The tax reform has been coming for a long time and is a requirement of the International Monetary Fund (IMF), an economy like Peru’s cannot have income of such a small magnitude, and that is going to have to continue. It would be good for the new economy minister to follow what Francke was advancing and hopefully provide stability. There are short-term challenges, such as finishing stabilizing the economy and guaranteeing that this year it will grow by 3% or 4%. Predictability must be provided, so that economic agents can anticipate their decisions based on what the Government will decide. Also that long-term projects be designed, such as infrastructure and agriculture.

The pension system is very fundamental for a country and it is true that the AFPs have worked very poorly, but instead of eliminating them they must be reformed, so that they serve the people more than the companies.