Peru increasing taxes

| May 11, 2018

Peru’s government has increased excise taxes on cigarettes, sugary drinks, alcohol and polluting cars in a bid to tackle public health problems linked to obesity and cancer, while shoring up public resources, according to a Reuters report.

The finance ministry said the tax on cigarettes would rise to 0.27 sol ($0.08) from 0.18 sol each.

The National Society of Industries, a manufacturing association, warned the tax increases would lead to more contraband and pirated goods.

But the government of President Martin Vizcarra, who took office in March, promised to be vigilant in the face of attempts to evade the new taxes.

Addressing the impacts of non-communicable diseases associated with smoking, drinking, obesity and pollution each year cost Peru $24 billion, or about 11 percent of GDP, the finance ministry said, citing a study from Harvard University.

Government spending on health care in Peru was about 3.7 percent of GDP, the ministry added.

Vizcarra’s government said also that it would eliminate some tax exemptions following three straight years of declines in tax revenues caused by a slowdown in economic growth.

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Category: Breaking News, Harm reduction, Tax

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