Peru Congress incorporates congressional expenses allocation to salaries

In a move that was initially criticized, Congress voted 61-17 to incorporate the allocation for expenses into their monthly paycheck. The allocation does not become part of their wages per se, as it is not included in pension and health insurance benefit contributions, but it will be automatically paid without the need for accountability.

The decision, according to the president of Congress, Javier Velásquez Quesquén, will remove a source of irregularities.

A member of Congress earns a gross monthly salary of 15,600 soles ($5,473), or a net pay of 10,000 soles ($3,500). The allocation, of 7,617 soles or approximately $2,672, will now be paid every month. Although it is specifically for congressional expenses that include meals and travel to constituencies, there is no longer a requirement to produce vouchers and receipts to prove how it is being used. However, the allocation will now pay 30% income tax, which operations costs were not subject to before. The total net to be received will be about 15,200, or approximately $5,330.

When President Alan Garcia was elected in 2006, he immediately slashed wages by approximately 40% in Congress, and reduced wages of all public service employees, on the grounds that they were earning first world wages in a developing world nation.

During the Fujimori and Toledo governments, members of congress earned an average of $8,000, including the allocation for expenses. On August 1, 2006, Emergency Decree 019-2006 set gross wages in Congress at 15,600 soles ($5,473), plus up to 7,617 soles ($2,672) in operation costs to cover travel and visits to members’ constituencies. Thirty per cent of the operations costs had to be substantiated with receipts.

The need to account for their expenditures with receipts led dozen of members of congress to fudge their accounts and produce bogus vouchers, a situation that led constantly to scandals, suspensions and stripping of immunity. In the debate to amend the regulations on Congressional salaries, congressman Raul Castro of Unidad Nacional said that often they were expected to buy saucepans for a soup kitchen, or bricks and cement when visiting a village in the provinces where often it was difficult to obtain a receipt.

Percy Medina, technical secretary of Transparencia, the independent, non-partisan political observation group, considers Congress’ decision to be a step in the right direction.
“The congressional expenses have always been a source of problems for Congress and legislators. I believe that a good a decision has been made, it is probably not the best possible solution, but at least there will be no more scandals in the submission of accounts,” said Medina in an interview with Andina news agency. “At least we will avoid the scandals, and that is a step forward.”

However, Medina said the ideal situation would have been for Congress itself to absorb some of the costs related to parliamentary responsibilities, such as the rental of decentralized offices or travel fares to constituencies. By doing this, Congress would have been able to incorporate a much lower amount for operational costs to the wages of law makers. As Medina pointed out, law makers actually will be receiving less cash than before, since they will now have to pay income tax on the expenses allocation.

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