stated that the Government will seek to reduce tax evasion by 2 percentage points, considering that it currently accounts for 9% of gross domestic product (GDP). This is expected to generate approximately S/20 billion (about US$6 billion) in additional tax revenue.
"We want to reduce tax evasion by two percentage points because that would amount to US$6 billion, or approximately S/20 billion," the Cabinet member stated.
"If we were to reduce tax evasion over two years and collect an additional S/20 billion, we could allocate S/10 billion (about US$3 billion) to infrastructure and S/10 billion (about US$3 billion) to social spending," he added.
The government official noted that tax non-compliance currently amounts to 9% of national GDP.
"One of the major challenges is Peru's high level of tax non-compliance, which stands at 9% of GDP, compared with a regional average of 6.7%," the minister said.
"How paradoxical that is: a country that grows more but collects less. Thus, there is considerable room to improve tax collection without changing the current rate of income tax or the General Sales Tax (IGV) by even a fraction of a percentage point," Cuba explained.
"We want to collect more revenue to spend on two areas: infrastructure, such as highways, roads, and so on, and social policies to support the most vulnerable sectors. All this tax effort is aimed at improving competitiveness through infrastructure and social justice," he added.
The minister clarified that the Government's measures to reduce tax non-compliance will not focus on small businesses or informal workers, but rather on other sectors.
"If the informal small business were to become formal, it would not pay much in taxes because it earns very little. And if informal workers were all to become formal, they would not pay much in taxes either because they would be within the range of those who do not pay taxes. This is not about going after the poorest," Cuba stated.
"The tax evader in Peru is a medium-sized company that acquires fake invoices, and you can even see the buying and selling of fake invoices on TikTok. That is where the main problem lies," he emphasized.
(END) CNA/MVB