Taxation in Peru: challenges and perspectives for sustainable development

In a context of regulatory and economic changes, the structure of taxation and its application become key points for the sustainable development of the country. Jorge Picón Gonzáles, partner at Picón & Asociados, offers his insight on the recent modifications to Income Tax deductions, the challenges facing the tax authority Sunat in its management, and the impact of the recession on tax collection. Picón highlights the negative impact of non-technical interpretations by the Tax Administration on tax regulations, leading to confusion among taxpayers. He gives an example of a decision related to guarantee accounts in the real estate sector that he considers absurd and problematic. The complexity and challenges for taxpayers in complying with tax regulations underscore the need for greater clarity in the application of the rules. He emphasizes the importance of demonstrating the causality of expenses for their deductibility in Income Tax, an increasingly difficult aspect given the scrutiny of the Tax Administration. He points out the increase in formal requirements for expense deductions, along with the introduction of new figures such as "subjects without operational capacity", creating legal uncertainty for taxpayers. The trend of the Tax Court ruling against taxpayers out of caution against corruption, coupled with an imbalance in tax legislation in favor of the treasury, has led the Judicial Branch and the Constitutional Court to play more significant roles in tax justice. Picón highlights the importance of addressing the increasing informalization of the economy to achieve revenue goals and promote economic growth. He anticipates a rebound in tax collection this year, driven by improvements in international prices of metals and agro-exportation, despite the recession. Regarding the challenges for the new head of Sunat, Picón emphasizes the need to create a convincing perception of risk among informal taxpayers to encourage their formalization. A comprehensive strategy is required to tackle the challenges of tax administration and promote tax compliance in the country.