{
  "title": "Peru: Selected Issues",
  "publication": "IMF Staff Country Reports, January 13, 2020",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2020/01/13/peru-selected-issues-48943",
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  "summary": "This Selected Issues paper evaluates features of the Peruvian tax system that may have contributed to weak revenue growth, as well as reforms to strengthen the tax system.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- This Selected Issues paper evaluates features of the Peruvian tax system that may have contributed to weak revenue growth, as well as reforms to strengthen the tax system.\n- Using data on domestic tax collection in conjunction with cross-country data on tax rates, collection and tax expenditures, the paper attempts to shed light on the factors that distinguish tax revenue mobilization in Peru from other countries in the region.\n- The paper discusses recent reforms in tax policy and tax administration, and presents advice for continued progress in these areas."
    },
    {
      "heading": "Key findings",
      "content": "- Elimination of multiple tax regimes for small businesses can provide a boost to revenues from corporate taxes.\n- An IMF technical evaluation of the small business tax regimes finds that a rationalization of the two existing regimes into one with the same marginal rate as the general regime will result in revenue gains of around 0.14 percent of GDP.\n- There is ample room to increase the contribution of excises and property taxes to overall tax revenues.\n- Relative to the regional average, Peru will continue to lag peer economies even if the current reform performs at full potential, suggesting room for further policy reforms to bring excise taxes in line with the levels of comparable economies."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Rationalize small business tax regimes into a single regime aligned with the general regime marginal rate to capture estimated revenue gains of around 0.14 percent of GDP.\n- Strengthen and broaden excise tax policy to align excise levels with comparable economies in the region.\n- Enhance the role of property taxes in the overall tax mix to increase revenue mobilization.\n- Continue reforms in tax policy and tax administration to improve domestic tax collection effectiveness."
    },
    {
      "heading": "Subjects and keywords (as listed)",
      "content": "- Subject: Central bank policy rate, Financial services, Foreign exchange, Monetary policy, Real exchange rates, Reserve requirements, Revenue administration, Taxes, Value-added tax\n- Keywords: Asia and Pacific, Caribbean, Central bank policy rate, CR, dollarization, Global, inflation targeting framework, ISCR, macro-prudential policies, monetary policy rate, output gap, Peru, policy instrument, Policy rate, Policy rate decision, policy rate gap, price boom, rate, Real exchange rates, Reserve requirements, transmission mechanism, Value-added tax\n\nPeru: Selected Issues, January 13, 2020 (IMF Staff Country Reports 2020, 004).\n\n---\n\n Content in this bundle\n\n- Peru: Selected Issues; IMF Country Report No. 20/4; December 20, 2019\n  - Peru: Selected Issues; IMF Country Report No. 20/4; December 20, 2019 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Peru: Selected Issues; IMF Country Report No. 20/4; December 20, 2019 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: January 13, 2020",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9781513526126.002",
    "This Selected Issues paper evaluates features of the Peruvian tax system that may have contributed to weak revenue growth, as well as reforms to strengthen the tax system.",
    "Using data on domestic tax collection in conjunction with cross-country data on tax rates, collection and tax expenditures, the paper attempts to shed light on the factors that distinguish tax revenue mobilization in Peru from other countries in the region.",
    "The paper discusses recent reforms in tax policy and tax administration, and presents advice for continued progress in these areas.",
    "Elimination of multiple tax regimes for small businesses can provide a boost to revenues from corporate taxes.",
    "An IMF technical evaluation of the small business tax regimes finds that a rationalization of the two existing regimes into one with the same marginal rate as the general regime will result in revenue gains of around 0.14 percent of GDP.",
    "There is ample room to increase the contribution of excises and property taxes to overall tax revenues.",
    "Relative to the regional average, Peru will continue to lag peer economies even if the current reform performs at full potential, suggesting room for further policy reforms to bring excise taxes in line with the levels of comparable economies.",
    "Rationalize small business tax regimes into a single regime aligned with the general regime marginal rate to capture estimated revenue gains of around 0.14 percent of GDP.",
    "Strengthen and broaden excise tax policy to align excise levels with comparable economies in the region.",
    "Enhance the role of property taxes in the overall tax mix to increase revenue mobilization.",
    "Continue reforms in tax policy and tax administration to improve domestic tax collection effectiveness.",
    "Subject: Central bank policy rate, Financial services, Foreign exchange, Monetary policy, Real exchange rates, Reserve requirements, Revenue administration, Taxes, Value-added tax",
    "Keywords: Asia and Pacific, Caribbean, Central bank policy rate, CR, dollarization, Global, inflation targeting framework, ISCR, macro-prudential policies, monetary policy rate, output gap, Peru, policy instrument, Policy rate, Policy rate decision, policy rate gap, price boom, rate, Real exchange rates, Reserve requirements, transmission mechanism, Value-added tax",
    "**Peru: Selected Issues; IMF Country Report No. 20/4; December 20, 2019**"
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