25 days lost thanks to the State bureaucracy

By Taxpayers Association

The economy Peruvian is very informal. Some of the main factors that keep more than 75% of businessmen away from formality are the bureaucratic and tax burden imposed by the Government.

The truth is that we can get a clearer idea of the impact of bureaucratic burden in Peru through the Bureaucracy Index, an analysis that determines how many hours a small business spends complying with all its bureaucratic obligations. This is an initiative of the Atlas Network, which had the participation of the Association of Taxpayers of Peru.

According to José Ignacio Beteta, president of the Association, “in this investigation procedures related to employment administration, business operations, changes in regulations and specific procedures of each sector to which the representative companies of the country belong were reviewed. The results indicate that the companies that make up the primary sector are the ones that must invest more time in complying with all the procedures required by the State, since, on average, they allocate 797 hours to their bureaucratic obligations each year, something incredible, ”he said. the.

In addition, after evaluating companies from different sectors and economic activities, it was determined that the procedures that consume the most time are those related to the administration of business operations, requiring about 468 hours each year. Within this category is the tax declaration such as IGV, Property Tax, Income Tax, etc. This means that tax obligations have a determining role within the bureaucracy, being one of the main barriers to the formalization and growth of companies.

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Taking into account the time and number of people required to complete each procedure, it was determined that, on average, small businessmen in Peru invest 591 hours a year in complying with all their bureaucratic obligations. According to Alejandra Túpac Yupanqui, a researcher at the Taxpayers Association, “this means that companies in general lose 25 days each year in compliance with procedures, placing us in 8th place out of the 11 Latin American countries evaluated in this investigation.” Given this reality, the path to formality is impossible. Informality will continue to be stable or grow, and we will live in a country without institutions, without a social contract, without a system and without order.

An index never seen before

The Association of Taxpayers of Peru (ACP) participated in the preparation of the 2022 Bureaucracy Index, an initiative of the Atlas Network and the Adam Smith Center for Economic Freedom, together with important Latin American organizations led by the researcher and economist Sary Levy. The presentation of this study was held at Florida International University and ACP attended on behalf of Peru to publicize the results of this research.

In this event participated Cedice Libertad from Venezuela, Fundación Libertad from Argentina, Liberal Institute from Brazil, Institute of Political Science Hernán Echavarría Olózaga from Colombia, Ideas Lab from Costa Rica, Institute Libertad y Desarrollo from Chile, Ecuadorian Institute of Political Economy from Ecuador, México Evalúa from Mexico, the OMG Institute from the Dominican Republic and the Center for Development Studies from Uruguay. Initiatives like this, which promote the improvement of State services in the face of investment and entrepreneurship, bring us closer and closer to solutions that encourage the development of each country.