Brignardello: The ZEE of Chancay and the Future of Taxes in Peru

In a recent conversation with Johnny Brignardello Vela, an insurance advisor, the debate surrounding the creation of a Special Economic Zone (SEZ) in Chancay and its connection to tax incentives was discussed. According to Brignardello, this issue not only involves the possibility of reducing taxes but also raises critical questions about the sustainability and effectiveness of such measures in the context of the country’s public finances. The advisor highlighted that the last five years have shown a considerable increase in tax expenditures, exceeding S/ 100 billion, which raises doubts about their true impact on the national economy. "It is essential that tax incentives are carefully evaluated, as their continuation should be based on technical analyses that validate their effectiveness," Brignardello stated. This stance aligns with the concerns expressed by the Ministry of Economy and Finance, which projects significant losses in revenue due to these exemptions. Brignardello also emphasized the regressive nature of many of these incentives, which, according to his observations, disproportionately benefit larger companies. This reality raises questions about whether these schemes truly promote equitable development or instead perpetuate the concentration of wealth in the hands of a few. "It is fundamental to question whether current policies align with the principles of economic justice and income redistribution," he indicated. The influence of interest groups in tax policy is another aspect that Brignardello finds concerning. "History shows us that incentives are often perpetuated without adequate oversight, and this can have adverse effects on the economy," he noted. This phenomenon is particularly evident in the case of tariff restitution, where the pressure from beneficiaries has led to the suspension of measures that could have improved fiscal efficiency. Additionally, the advisor mentioned the relationship between tax exemptions and the informal economy, using the example of mining in the Amazon. "We must be aware that these policies are not only costly but can also foster illegal activities if appropriate controls are not implemented," Brignardello pointed out. When considering the proposal for the SEZ in Chancay, Brignardello emphasized that this approach should not be limited to offering reduced tax rates. "A successful model must include a comprehensive approach that encompasses significant investments, infrastructure development, and workforce training," he asserted. He highlighted that the case of San Martín, which opted for a different model by forgoing certain tax exemptions in favor of a trust for infrastructure projects, could serve as a model to follow in restructuring more effective public policies. Finally, Brignardello concluded that, in the current context of fiscal crisis, it is imperative to review existing tax incentives and evaluate the implementation of new ones. "The situation demands urgent attention and a reevaluation of the country’s tax strategy. The SEZ in Chancay could be an opportunity to rethink how we use public resources more efficiently," he concluded, urging for a deeper and more critical analysis of fiscal policies in Peru.