LIMA Jan 7 The government of Peruvian President
Pedro Pablo Kuczynski passed a law on Saturday that will lower
the Value Added Tax rate by one point to 17 percent starting
July 1, six months later than previously planned.
The reduction can only go into effect if revenues from the
tax equal at least 7.2 percent of gross domestic product in the
12 months through May 31, according to the law published on the
website of the government gazette El Peruano.
Kuczynski, who took office in late July, had campaigned on a
promise to cut the VAT rate to 15 percent from 18 percent to
broaden the payer base and stimulate consumption.
But his centrist government has opted to lower the rate
gradually as it grapples with slipping tax revenues and tries to
rein in a bigger-than-anticipated fiscal deficit left by the
(Reporting By Mitra Taj; editing by Diane Craft)