Peruvian Government Passes Law to Tackle Tax Avoidance

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LIMA, PERU — 

The Peruvian government passed a law on Monday aimed at closing loopholes that allow companies to avoid paying taxes, estimating it will be able to collect additional revenues equal to nearly 1 percent of gross domestic product per year.

The law, which was passed by decree after being approved by Congress, targets tax schemes including corporate reorganizations and contracts that defer earnings or bring forward spending in order to avoid taxes, the finance ministry said in a statement.

The government expects the new law to generate an additional 6 billion soles ($1.8 billion) per year, Prime Minister Salvador del Solar said in an interview with state-run TV Peru.

The measure will likely help the government meet its goal of trimming the fiscal deficit to its goal of 2.2 percent of GDP this year and 1 percent in 2021, when President Martin Vizcarra's term ends.

Peru, the world's second-biggest copper producer, is one of Latin America's most stable economies. Gross domestic product expanded 4 percent last year.

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Peruvian Government Passes Law to Tackle Tax Avoidance
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