Peru’s Tax Reform: VAT Decrease and IPM Increase to Strengthen Municipal Finances by 2029

• Peru is changing the VAT and Municipal Promotion Tax rates
• The current indirect tax rate is 18 percent with 16 percent VAT and 2 percent IPM
• Starting in 2026, the VAT will decrease from 16 percent to 14 percent by 2029
• The IPM will increase to compensate for the VAT reduction
• The reform aims to improve municipal finances through the FONCOMUN fund
• There is debate about the fiscal sustainability and impact on national revenue

Source: taxand.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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