The recent interpretation of the Constitutional Court regarding the prohibition of Congress to generate public spendingwhich will be only partially restricted, could lead to a loss of between S/81,314 million and S/95,146 million, 8.56% and 10.02%, respectively, of the GDP planned in 2022.
The Minister of Economy and Finance, Kurt Burneowarned in this way that a list of initiatives presented within various parliamentary benches places the fiscal fund in a sensitive position “that he never saw during his years of professional practice.”
Among the barrage of bills with this same design —undermining tax stability, while complying with populist slogans, according to specialists consulted on the matter— there is, first of all, the attempt to assume the power of the MEF to set the rates and amounts of the selective consumption tax (ISC), a measure accompanied and welcomed from its genesis by the big industry, which, precisely, is affected by this tax.
Another of the initiatives proposes granting delinquent companies with the Sunat a special incentive regime that involves partially or totally cutting their debt, a ‘forgiveness’ without due technical criteria that could lead to a setback of S/33.2 billion on the fiscal fund. It is the hardest blow that the MEF anticipates.
This, while the congressmen keep in suspense the approval of 11 bills that the Executive Power has sent them a month and a half ago, the same ones that are part of the reactivation plan Impulso Perúdirected, precisely, to increase the collection and contribute to the recovery of employment.
“It is as if the ceiling (income) were lowered and at the same time the floor (expenses) was raised. I wish legislators could reflect more on the financial effects of what they are doing,” Burneo said in a recent column for La República.
Cannibalize the fiscal box
The economist Carlos Casas finds in this two-way road a irreparable damage to economic stability that could impact our investment gradesince these new prerogatives of Congress leave open the possibility of a higher deficit in the future that is not consistent with the country’s fiscal discipline.
“IGV is being cannibalized, which we remember yields 2 points to municipalities and another 2 to regional governments. There are 14 left for the national scope and if they are going to allocate it to different issues without giving flexibility to the MEF, when there is an urgent requirement, the necessary corrections cannot be made, ”said the former Vice Minister of Economy.
TC risks the stability of the fiscal box
MEF questioned that the Constitutional Court, through files 00018-2021-PI/TC and 00027-2021-PI/TC, ceded the spending initiative to Parliament.
The tribunes considered that the restrictions of article 79 of the Constitution apply, only, if the Public Budget of the current fiscal year is affected.
In Minister Burneo’s opinion, from now on Congress “can create public spending without any limitation, which It must be programmed in the budget of the following fiscal years”.