By Taxpayers Association
The Minister Romulo MuchOr he has declared that the board of directors of Petroperú will not be removed. But he has not declared what will be done with Petroperú. And the board of directors was very clear: either the company is liquidated (a very complicated scenario), or it is radically restructured (a costly scenario, but at least responsible), or it continues to receive money from our pockets (an unacceptable scenario, which could now drag the Banco de la Nación into a similar situation).
Look: Minister of Energy and Mines and President of Petroperú summoned to Congress
Stating that the board of directors of Petroperú will not be changed and not explaining what will be done to improve the company’s situation is the attitude of the same old politician, of which we are already accustomed and quite tired.
What is required is a radical change that this Government and its cabinet will not be able to achieve. And what change are we referring to? A change of focus on who should be at the centre of the State’s concerns. Today the State is concerned about the State and not about the taxpayers. And the taxpayer is the most important character in this story.
Peru is going through a period of weak economic recovery, with insufficient growth for a developing country. Private investment was practically non-existent in the first half of the year. In three years, 22 billion dollars in capital went to other countries; in addition, 60% of young people would leave the country if they could and 30% would not return.
We are also coming from a period of high inflation that has raised the cost of living, directly affecting Peruvians. But even so, our politicians hesitate to restructure (or liquidate) Petroperú: the Minister of Economy says that he “would feel uncomfortable” if more capital were injected into the state-owned company, and the Minister of Energy and Mines is not capable of standing firm and taking the bull by the horns.
But yes, everyone is aligned with Sunat in imposing more taxes on taxpayers. Imposing an additional tax such as that on digital platforms, the famous “Netflix Tax”, in a context like this, could not only be ineffective, but also counterproductive, further encouraging informality and reducing the tax base. Instead of focusing on increasing taxes, the Government should focus on improving public spending management and controlling current spending.
Look: Minister Rómulo Mucho on Petroperú’s board of directors: “There will be no changes”
INEFFICIENT SPENDING
In 2023, Peru closed with a fiscal deficit of 3.9%, which means that as a State we spend more money than we have. However, the question is, what do we spend the money we collect from taxpayers’ pockets on?
The Peruvian government has increased its budget for 2024 to 240,806 million soles, 12% more than in 2023. Although an increase in the budget might seem beneficial to meet the needs of the population, especially the poorest, the reality is that most of these resources are allocated to current expenses, mainly to payroll, CAS contracts, consultancies and other services.
This expenditure, which represents 65% of the total budget, leaves only 26% for investments in infrastructure such as hospitals, schools, and water and sewage networks, which limits long-term development and the reduction of social gaps.
If we focus on investigating how the State spends taxpayers’ money, the findings are truly worrying. The State spends a large part of the budget on current expenditure (payroll and consulting services).
Taxing VAT on digital services directly harms small and micro-enterprises that are struggling to formalize themselves in the country. These economic units are crucial to the Peruvian economy. We demand that our ministers, those with an ethical and valuable professional history, stand firm against this injustice and not only reject any type of tax increase, but also stop the waste at Petroperú and in the state bureaucracy.
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