Peru To See 10 Percent Growth in Tax Revenues
March 23, 2011 Taxation in Peru
Peru is experiencing significant levels of growth in tax revenues this year, and is expected to see an overall budgetary surplus in 2011.
According to a statement released by Peru’s tax agency SUNAT on March 22nd, the country’s overall tax collections grew by 17.1 percent in February, compared to the same month last year. Total tax and customs collections by the central government for the month amounted to PEN 1.59 billion (approx. USD 1.86 billion).
In a statement SUNAT commented on the results, saying, “…it is expected that in the coming month favorable results will continue for tax revenues.” SUNAT and local economic analysts predict that revenue figures will drop during the year, following the government’s reduction of several major tax rates, including dropping the national sales tax to 18 percent, lowering banking transaction taxes and slashing import duties. SUNAT estimates that overall tax revenues for 2011 will grow by approximately 10 percent. Peru’s GDP is expected to grow by 7 percent this year. The government is forecasted to see a marginal budgetary surplus this year, after a deficit of 0.6 percent in 2010.
Currently the Peruvian government is debating the feasibility of raising greater revenue levels by implementing a new tax on water consumption in the agricultural industry and in urban regions. The government hopes that such a tax would raise the PEN 8.7 million necessary to overhaul the country’s water delivery infrastructure and irrigation systems.
In light of Peru’s tax revenue growth levels and positive economic forecasts, Moody raised the rating on the government’s bonds from “stable” to “positive” on March 21st. The rating agency stated that further upward revisions are possible, pending continued monitoring of the country’s economy over the next 12 months.
Photo by auntjojo