Economy Minister: VAT exemption for family basket products ‘did not produce the results we expected’

Minister of Economy and Finance (MEF), Oscar Graham, acknowledged that the government’s measure freeing General Sales Tax (IGV) The staples of the family basket have not delivered the expected results in favor of the Peruvian population, which is suffering from rising prices for basic foodstuffs as a result of the international crisis caused by rising fuel prices and the Russian invasion. Ukraine.

“Indeed, removal, liberation from VAT temporarily it did not give the effects that we expected, that’s for sure,” he said in a special program The country we reactivate from RPP news.

owner FEM He pointed out that the measure had a more favorable impact “in the formal chain” of the food supply, but “not as much in the informal chain.”

However, Graham pointed out that it should be taken into account that in parallel with the justification initiative VATthe world price of corn, one of the main inputs in the chicken production chain, remained high.

In this sense, he assured that if the rehabilitation had not been applied, the prices for basic foodstuffs in the local market would have been higher.

Recall that in mid-April this year, it was decided to exempt the following goods from VAT: chicken, eggs, sugar, raw pasta and bread. The rule set the duration of the measure until July 31, 2022.

ISC exemption will not be extended

Graham pointed out that the liquidation VATas well as exemption from Selective Consumption Tax (ISC) to fuel are technical initiatives that are part of a package of measures, including vouchers for vulnerable social groups, to mitigate the effects of the international crisis. However, he said that after assessing its consequences, “other, more targeted and more effective measures need to be taken.”

The Minister noted that the measure of exemption from ISK – valid until June 30, 2022 – means stopping the collection of 325 million soles per month for the state, an amount that can cover two months of assistance to 1 million 300 thousand beneficiaries of the social program.

He pointed out that groups whose activities do not affect the chain of distribution and production of essentials also benefit from this exemption, so now is the time to correct. “That is why this measure cannot continue,” he said.