Peruvian tax agency Sunat will look to double its audits during President Ollanta Humala’s five-year term in order to tackle tax evasion, Economy and Finance Minister Luis Miguel Castilla said.
“We are going to double the number of investigations to be able to increase permanent resources,” Castilla was quoted as saying by state news agency Andina.
Humala, who has been in office for just over a month, has promised to increase the government’s tax collection from its current rate of about 15 percent of gross domestic product to fund social programs.
“That has to be tackled on multiple fronts,” Castilla said. “One is to combat evasion, which is very high and where 50 percent of income tax is not paid. As well, there is a very large number of independent workers who are not paying taxes.”
Castilla said the government will also look to limit contraband, which accounts for about 3 percent of Peru’s imports.
“We will have a head-on fight against smuggling and the Armed Forces and National Police of Peru are going to have an important role in controlling the borders, which are sieves,” Castilla said.
The ministry will also look to collect tax debts that have been accumulating in the Fiscal Court.
“That will involve not only small companies, but also very large companies that don’t pay their taxes or that argue certain legal issues to elude the payment,” he added.
Peru’s government also plans to increase tax collection by implementing a windfall tax on mining companies. Government and industry representatives have reached an agreement that will provide the state with an additional 3 billion soles (approximately $1.1 billion) per year from the new tax, although they are still working out the final details of the new payment.
Besides the new mining tax, which was a central part of Humala’s campaign, the new government does not plan to implement new taxes on other sectors, Castilla said.
In the mean time perhaps a state run lottery so people can cheerfully pay their taxes might benefit social programs very well.