Introduction.
History has recorded the many ways in which people, since
they began to organize themselves into larger social groups, saw the need for a
form of contribution of goods or resources from everyone, to be allocated to
the means or mechanisms that would contribute to the better management of the
group; even determining in this way, the subsequent development of human
societies. There are records of this from ancient Egypt to the Mayans, Aztecs
or Incas, passing through Greece or Rome; and of course from many other
peoples, some somewhat older than those mentioned.
Many centuries or millennia later, this primitive form of
economic and political organization of societies in formation, not only remains
in force but is even more rooted, because it is a general truth that said act
known today as Taxing, will be better or more optimal for nations or countries
as long as it includes or encompasses more activities, people, companies and
other organizations or entities; because, in this way, the State will have more
resources to allocate to education, health, defense and in general to the
provision of infrastructure that promotes growth and development; and, if the
collection of taxes is also sustained and sustainable, that is, it grows
annually with respect to the Gross Domestic Product (GDP), it will be possible
to avoid or reduce national or international debt, it will be possible to
positively influence the fiscal deficit and, in this way, make public and
private credit or financing cheaper, the increase in the cost of which slows
down economic growth and the consequent development of nations.
Aware of this, Jesus Christ, when responding to a Pharisee
with the famous phrase "to Caesar what is Caesar's and to God what is
God's," according to the Gospel of Matthew 22, 21, perhaps also wanted to
subtly recognize the importance of the act of paying taxes by mentioning what
partly explains the existence of social groups from their appearance to the
present day; Specifically referring to a duty to the Roman Empire that implies
an essential responsibility to organized social groups or States, through the
generally monetary contribution of individuals or companies after obtaining
economic benefits, through the free and voluntary exercise of some type of
business.
For this reason, it is important to analyze and highlight
the aspects that positively influence Peru's tax collection capacity,
identifying and resolving the negative factors that negatively influence it. A
country that, although it has grown steadily in recent decades, as well as its
tax collection, still has important limitations that need to be analyzed, many
of them determined by government inefficiency, informality or corruption.
Economic growth and Peruvian tax pressure.
Peru grew in the last 20 years to become a
high-middle-income economy given its macroeconomic stability, its commercial
openness and a favorable international environment. In fact, its Gross Domestic
Product (GDP) grew more than fourfold, as did per capita income: from USD 2,040
in 2002 and USD 2,126 in 2003, to USD 7,126 in 2022 and USD 7,790 in 2023
(World Bank, 2024); while the ratio of tax revenues to GDP, known as tax
pressure, also grew during the same period, even in the pandemic years: in 2019
it was 14.4%, in 2020 it was 13% and in 2021 it was 16.10% (Swissinfo.ch,
2022).
In 2023, there was a 0.6% contraction of GDP, which meant a reduction in
tax collection, due to a deterioration in macroeconomic variables, lower
international prices, internal social conflicts and adverse weather conditions
(SUNAT, 2024). But in 2024, tax collection recovered again, reaching S/.
155,756 million, 3.3% more than the previous year (S/. 8,510 million more), and
exceeding what was forecast in the Multiannual Macroeconomic Framework
2025-2028 of the Ministry of Economy and Finance (MEF).
Although these figures are encouraging, the country is still
far from the tax pressure percentages of first world nations, those that are
part of the Organization for Economic Cooperation and Development (OECD), for
example, whose members usually record collection levels around 30% of their
GDP. Peru must therefore close the gap so that its inclusion - currently in
process - in this organization not only occurs, but also to increasingly have
an optimal level of resources that allow a minimally efficient performance of
the State at all levels; despite the shaky national political, economic and
social situation determined by the effects of the inefficient government of
Pedro Castillo and his successor, and
the apparent inability of the opposition and the Peruvian Congress to be a
viable and reliable alternative.
Investment and tax reform.
Consequently, although the tax administration and collection
agencies (mainly SUNAT and municipalities) can allocate a larger budget to
increasing and training personnel, or to the acquisition of materials and
equipment, a true and complete review and reform of the Peruvian tax system
would also be opportune in order to make the management, inspection and
collection of all taxes more efficient, economical and effective.
In this sense, it would not be a bad idea to review the
exemptions and non-taxes regarding some taxes and sectors to verify their
technical and legal basis and, essentially, whether they have fulfilled their
purposes. Only in the private education sector is it appropriate to ask how
much money SUNAT and municipalities failed to receive due to the validity of
exemptions or non-taxation of income tax, sales tax, vehicle tax or property
tax, due to the laudable but in many cases unfulfilled objective of reinvesting
the income obtained in infrastructure, training or research and development,
for the sake of the advancement of science and the progress of Peru.1
Greater control of evasion and avoidance through tax audits.
At the same time, the work of tax inspection, supervision or
auditing can be made more intensive and efficient, to verify whether what is
declared and paid by formal taxpayers is correct and/or to sanction, when
appropriate, the tax fraudsters detected.
The majority of the million-dollar payments made by various
mining companies to SUNAT in 2021 were the result of tax audits (Antamina, 800
million; Cerro Verde, 1,476 million; Buenaventura, 2,134 million; MMG Las
Bambas, 690 million). At the municipal level, there are also tax audit
processes that ended with the collection of significant amounts of Property Tax
and Tax Fines, some of which I was in charge of directing in the jungle
department of Loreto; such as the one that ended with the payment of S/. 1,124,179.40
by Petróleos del Perú S.A. to the District Municipality of Urarinas, the S/.
603,001.94 transferred in April 2021 by Pluspetrol Norte S.A. to the District
Municipality of El Tigre, or the more than S/. 300,000.00 collected from
Petroperú S.A. for the District Municipality of Morona.
And in 2023, despite not having been a good year - as
detailed in previous paragraphs - SUNAT's tax collection resulting solely from
administrative and criminal litigation proceedings, initiated against natural
persons and companies, normally with a tax audit or inspection process,
amounted to S/. 8,946.80 (SUNAT, 2024).
Taxation and the problem of informality.
Such tax audit actions can be carried out with the
Ministries of Production and/or Labor, or with entities such as the National
Superintendence of Labor Inspection (SUNAFIL), so that the results are more
effective, transcend the tax scope of SUNAT or the municipalities, and reduce
the significant percentage of the informal economy that corrodes Peru. In this
way, it will be possible to avoid further tax fraud against the Peruvian State and that workers have adequate working conditions with better and fair salaries considering some type of insurance, Compensation for Length of Service (CTS), or contributions to the private or state system for future pensions.
Such joint and coordinated inspections, however, must be
carried out in the context of a reform that seeks to reduce informality in a
sustainable manner, without reducing the capacity to grow and be efficient of
the inspected company or business, nor its capacity to innovate. In short,
finding a balance between the application of the law and the creation of an
environment in which compliance is feasible; since reforms that combine
inspections with policies favorable to companies may represent a possible way
forward, among other things by reducing the costs of hiring formal workers
(Santos, 2025).2
More businesses and companies to pay taxes for development.
The existence of more formal businesses or companies that pay taxes to the
State will germinate a virtuous circle that will benefit both people, as well
as localities and Peru in general; and, precisely for this reason, any measure
that contradicts or prevents that, goes against any action tending towards
development since the times when societies began to organize themselves. In
this way, SUNAT and all municipalities will be increasing collectors or
collectors, among other taxes, of the income tax or the general sales tax
(IGV), the alcabala tax, the vehicle property tax cular or property tax,
respectively, to companies or businesses that are encouraged, generated or
formalized; while some regions or departments, and various institutions may in
turn benefit from resources from the canon (mining, oil,...).
For the efficient and controlled use of tax revenues.
However, all the above arguments will be of no use if the
resources available in general and the tax revenues obtained by SUNAT or the
municipalities in particular, are not allocated to the efficient management of
the State at all levels and areas; in fact, that is the only way for the
population in general to benefit from its collection.
It is
therefore pertinent that the Judiciary, the Attorney General's Office or the
Comptroller General of the Republic continue to optimize their processes, equipment
and personnel so that these resources do not end up benefiting mostly inept and
corrupt bureaucrats, some of whom later apply to be authorities, presumably
thanks in part to the money illegally stolen when they worked as state workers
or officials; while many others boast homes, cars and other assets with the
money that should have benefited the poorest but which perpetuates, on the
contrary, the vicious circle of corruption that has corroded Peru since its
Independence in 1821.
In this regard, Paolo Mauro, deputy director of the Fiscal
Affairs Department of the International Monetary Fund (IMF), stated: "If
you compare the countries that are perceived as less corrupt with those that
are perceived as more corrupt, the differences in the proportion of income as
part of the Gross Domestic Product (GDP) is 4 percentage points." And if
we consider that the “average tax revenue for Latin America is 26.5% of GDP, an
increase of 4 percentage points is a very large amount.” If all countries
substantially improved their control of corruption, it would mean going from
26% to 30% and there would therefore be many more resources for productive
expenditure (BBC, 2019).
Accountability and other mechanisms for controlling public
spending.
For all these reasons, it is necessary to revitalize citizen
control mechanisms such as the currently almost extinct public accountability
process, or to promote training programs so that any citizen (congressman,
councilor, councilor or any minimally interested person) understands and
handles the income and expenditure information that, for example, is provided
by the Economic Transparency Portal of the Ministry of Economy and Finance
(MEF), in order to clearly know the amount and how all the income or funds
available in any public entity were obtained and, above all, how and on what
they are being spent or executed.
Furthermore, municipal councillors, regional councillors or
any worker in addition to the control offices that depend on the Comptroller's
Office, should have real facilities and the competence to effectively and
opportunely control the expenditure in their institutions, almost in the same
way that a warehouse is controlled by means of a card; in this case verifying
the generation, registration and custody of the documentation or support of all
expenditure of funds or expenses, and controlling the registration and real
existence or entry into the institution of the contracted service or good
(study, work, or acquisition of goods and other services).
And it would also be important to better disseminate the
effects of corruption on the economy and society in general, so that every
citizen or worker is willing to report the cases that they know of or discover.
In this sense, it is necessary to know, for example, the process for
contracting public works, where the economic impact of corruption seems to be
more noticeable; because, although a work is usually awarded to the lowest
bidder, later said contract becomes the most expensive or onerous due to the innumerable
extensions of work that no one seems to control. In this regard, the
Professional Colleges of Engineers - chapters of Sanitary Engineers or Civil
Engineers - and of Architects, could contribute sufficiently; not one or
another non-governmental institution that arises as an independent supervisor,
perhaps financed by some contractor or supervisor of the work in question.
Only in this way can there be a growing certainty that the
money of all will not benefit a few and will tend to the common good; which has
been and should continue to be the objective of all policy in the interest of a
developing society with justice, freedom and solidarity. And even more so if
there are still evident limitations in Peru in health, education or
infrastructure in general, due to the poor management of many authorities who
nevertheless skillfully handle the "art" of illegally extracting
public funds.
Corruption corrodes development.
Indeed, despite the advantageous Peruvian economic situation of the last decades already described, many public authorities did not begin the construction of useful or necessary public infrastructures, but rather many unviable or poorly executed works that resulted in waste due to sheer stupidity, but with a skillful management of the corruption that accompanies them.
Examples of this exist from Moquegua to Piura, passing through Cuzco, Lima or Loreto; in the latter there is the sadly famous sewerage project stubbornly undertaken by a former governor and former mayor, whose final investment of almost a billion soles (between studies, labor, pipelines and others) is buried in the bowels of Iquitos, the largest city in the Peruvian jungle, as an example of the ineptitude, corruption and even impunity in Peruvian public management before society in general and the Comptroller's Office and the fiscal and judicial entities in particular.
The figures of corruption in Peru.
According to the
Comptroller General, in 2022 corruption in Peru amounted to S/. 24,419.00
million; a significant part of the Republic's budget diverted to the pockets of
unscrupulous businessmen, authorities, officials and state workers who, in this
way, generally finance houses, cars, trips, alcohol, multiple partners, among
other vices that they cannot pay with a normal or legal salary. Thus, the majority is harmed by poorly or never-finished schools, paralyzed hospitals, lack of rural roads and other infrastructure that would promote business and trade in products and services and, with it, the general well-being and development of Peru.
Paralyzed public works and corruption.
The awarding of works and other contracts that result in
disputes between government entities and contractor companies or individuals,
many of which last for several years despite having had significant
expenditures or disbursements of state funds, also explains how and where a
large part of the public budget corroded by corruption ends up.To date, there is a total of 1,403 paralyzed public works,
involving 492 entities for an amount of S/. 10,839,598,792.3
A figure somewhat lower than that which was being handled by official sources until December 2023, amounting to more than S/. 26,000 million, comprising 2,300 paralyzed public works projects throughout Peru.
With corruption, poverty will continue to prevail.
If everything continues as it is, that is, if Peru continues
to grow as it has done in the last two decades amidst international ups and
downs and without facing up to solving or diminishing the national political
and social problems, the economic stability it boasts and the consequent growth
will be of little or no use. In this way, the poverty manifested in the latent
lack of basic infrastructure in health, education or transportation will
continue to be evident, as will the ostentation generally proclaimed by corrupt
politicians and/or public managers.
Therefore, it is necessary to know how to choose political authorities from among candidates with proven moral solvency and professional success; not stubbornly choosing candidates who are perhaps mafia-like because they cannot sufficiently demonstrate the origin of their resources or former authorities who have already shown how inefficient, unscrupulous and corrupt they are. Only in this way will Peruvian society be sure that all its citizens will participate in or benefit, sooner rather than later - or never - from the product of efficient and transparent management of the State.
Bibliography.
1. World Bank. (2024, October 21). Peru Overview. Retrieved
January 31, 2025, from
https://www.bancomundial.org/es/country/peru/overview#:~:text=La%20estabilidad%20macroecon%C3%B3mica%2C%20la%20apertura,a%20US%24%207126%20en%202022
https://www.bancomundial.org/es/country/peru/overview
2. BBC News Mundo. (2019, April 5). The millionaire income
that governments lose due to corruption (and how much this problem affects
Latin America). https://www.bbc.com/mundo/noticias-47823036
3. Comptroller General of the Republic. (n.d.). Paralyzed
Works. Public Works Information System. Retrieved January 30, 2025, from
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4. El Comercio. (2023, May 18). The cost of corruption.
https://elcomercio.pe/opinion/editorial/editorial-el-costo-de-la-corrupcion-editorial-nelson-shack-corrupcion-pedro-castillo-noticia/?ref=ecr
5. Government of Peru. (2024, January 6). Tax collection for
the year 2023 amounted to S/ 147,246 million.
https://www.gob.pe/institucion/sunat/noticias/895978-recaudacion-tributaria-del-ano-2023-ascendio-a-s-147-246-millones
6. Government of Peru. (2025, January 7). SUNAT recorded tax
revenues of S/. 155,756 million in 2024.
https://www.gob.pe/institucion/sunat/noticias/1087301-sunat-registro-ingresos-tributarios-por-s-155-756-millones-en-2024
7. Ministry of Finance. (2025, January 7). of Economy and
Finance (MEF), Multiannual Macroeconomic Framework 2025-2028, Lima, 2024.
8. Santos, Cesar. (2025, January 23). Combating informality
in Brazil: The hidden costs of labor inspections. Inter-American Development
Bank ("IDB").
https://blogs.iadb.org/ideas-que-cuentan/es/combatiendo-la-informalidad-en-brasil-los-costos-ocultos-de-las-inspecciones-laborales/?j=1137119&sfmc_sub=276751100&l=295_HTML&u=20454591&mid=100028582&jb=2030
9. SUNAT, Results-Based Management Report - Year 2023, Lima,
2024.
10. Swissinfo.ch. (2022, January 6). Peru had the highest
tax collection in 2021 in the last seven years.
https://www.swissinfo.ch/spa/per%c3%ba-tuvo-en-2021-la-mayor-recaudac3%c3%b3n-tributaria-de-los-%c3%baltimos-siete-a%c3%b1os/47243764#:~:text=Respecto%20a%20la%20presi%C3%B3n%20tributaria,2019%20(14%2C4%20%25).
11. Torres, Hernán. (2022, January 1). In 2021, Antamina and
3 mines paid tax debts. La República.
https://larepublica.pe/economia/2022/01/01/mineria-en-2021-antamina-y-3-minas-pagaron-deudas-tributarias-sunat
12. Vega Murrieta, Neil (2018, August 31). The oil
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https://caviles-mundanos.blogspot.com/2018/08/el-necesario-petroleo-que-parece.html
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https://caviles-mundanos.blogspot.com/2019/04/el-latente-problema-de-la-informalidad.html
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https://caviles-mundanos.blogspot.com/2024/05/apuntes-de-economia-politica-y-de-la.html
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1. So far, it is mostly evident that some universities have been created without adequate infrastructure or qualified personnel, and that some millionaires have emerged thanks - in part - to the money that was not taxed.
2. There is an excellent article on this topic focusing on Brazil, published on the Inter-American Development Bank (IDB) blog. See details in the Bibliography.
3. According to the website of the Comptroller's Office's Public Works Information System.