ising copper and gold exports, coupled with robust economic growth, will boost tax revenue in 2011 and give Peru its first fiscal surplus in three years, Finance Minister Ismael Benavides said.
The South American country expects to have a surplus equivalent to 0.6 percent of gross domestic product this year, compared with a 0.6 percent deficit last year and a 1.9 percent deficit in 2009, Benavides said during an event in Lima yesterday.
Surging exports of minerals, which account for almost two- thirds of the country’s sales overseas, helped lift Peru’s tax revenue 21 percent last year. Tax collection also climbed as GDP rose 8.8 percent, the strongest growth in Latin America, Benavides said. The $153 billion economy will probably expand about 7 percent this year, fueled by investment in mining and energy, he said.
Peru will lead growth in the region this year and have the lowest inflation,” Benavides said. “Private investment of around $50 billion in the next five years is going to spur growth.”
Peru’s exports will likely rise 15 percent to a record $42 billion this year as imports climb 20 percent to $35 billion, he said.
Peru may cut public debt to below 22 percent of GDP this year from 23 percent in 2010, Benavides said. Monthly tax collection will range from 5.5 billion soles （$1.98 billion） to 6 billion soles this year, he said. Last year’s average monthly revenue was 5.38 billion soles last year, according to data from the tax collection agency known as Sunat.
The government may lose an estimated 300 million soles of revenue between now and July because of a proposed tax cut on fuel to offset higher crude oil prices, Benavides said.
Sales Tax Reduction
Peru also cut its sales tax this month to 18 percent from 19 percent after higher food and fuel costs sparked the biggest rise in domestic consumer prices in more than two years.
The country will seek to modify a change in tax regulations that extended a levy on profits for local banks’ dollar forwards trading with non-residents, Benavides said.
The Peruvian sol temporarily weakened against the U.S. dollar in late January and early February on speculation the government would start taxing profits on dollar forwards of more than 60 days with non-residents. The currency has gained 1.3 percent this year, the second-best performer among major Latin American currencies tracked by Bloomberg.
“We’re going to propose a change in the law that corrects this so the situation can go back to normal for derivatives,” Benavides said. （Bloomerg）
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