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Tax take drops in March
In
March, tax revenues reached 1.24 billion soles (US$ 360 million). The
February reading represents a decline of 12.9% in real terms compared with
March 2001. According to the government tax agency Sunat
(Superintendencia Nacional de Administración Tributaria), the decline in
the tax collection can be explained mainly by lower income tax payments
compared with March last year. The tax haul also dropped owing to lesser
working days, as Easter was in March this year. In addition, the tax take
suffered from a cut in the so-called "solidarity" payroll tax and resulted
from some taxpayers taking advantage of a debate in Congress over setting
of interest rates on overdue taxes to avoid making annual payments. As a
result, income tax collection dropped 14.8% in real terms compared to
March 2001, whereas value-added tax (IGV, Impuesto General a las Ventas)
collection picked up by 1.2%, due to improved monitoring launched in March.
According to Sunat, income tax revenue would have increased in March if it
had not been for the negative impact of lower income tax rates. The tax
authority expects that the lower income tax rates will continue to
overshadow the tax collection in April. Panellists have lowered their
forecast for the fiscal balance a 0.1 percentage point from last month’s
forecast.
Consumer prices increase in
March for the first time in months driven by higher fuel prices
In
March, consumer prices increased 0.54%. The March spike was driven by
higher prices for fuels and education, which was partially compensated for
by lower prices for electrical appliances and public services. The March
figure represented the first monthly increase in consumer prices since
October last year and the highest monthly rate in one and a half years, as
suppressed domestic demand, in the wake of the recession, had kept a firm
lid on any attempts by business to mark up prices. Nevertheless, the
annual inflation rate remains negative at -1.1%, unchanged from February.
Moreover, the March price data was mainly due to higher fuel prices and
thus does not yet indicate a consumption recovery. The core inflation
index, which excludes the more volatile fuel category, among others,
remained virtually unchanged in March (+0.03% over February). As a
consequence, the annual core inflation rate dropped 0.1 percentage point
over February to 0.4%. Panellists believe that the deflationary scenario
will soon give way to a setting of increasing prices, as a broader based
economic recovery provides a backdrop for businesses to adjusted prices
upward.
Note:
The above text is an abridged version of the LatinFocus Consensus Forecast
briefing on Peru. For more details please click here.
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