In a perfect world, restructuring taxes, including those that address gambling, would be part of Peru’s post-pandemic economic recovery, according to the country’s minister of finance.
Alex Contreras took to the stage last Thursday (January 19) at a Canning House reception in Belgravia, London, where ministers and ambassadors gathered to present their recovery plans from the pandemic and address Peru's political instability.
Contreras’ remarks were made as thousands marched through Lima, demanding the resignation of interim President Dina Boluarte, who served as vice-president under former President Pedro Castillo, who was ousted on December 7 for attempting a de facto coup when he tried to shut down congress.
At least 55 people have been killed in violent clashes with police.
But on Thursday evening, a world away in the leafy environs of west London, the focus remained on how to improve the political situation through economic measures.
“Two years ago, we wanted to introduce tax reform, and we have a very comprehensive agenda, because you know that the Peruvian economy has a GDP eight points lower than the average in terms of tax revenues," said Contreras, when asked about possible gambling tax hikes.
“But this is on the agenda. When the Peruvian economy comes back and grows about 4 percent, we will talk about that.”
Contreras openly addressed the legislative backlog that Congress faces, as he revealed the plans of his government to introduce emergency stimulus measures to alleviate both economic, and therefore political, pressure.
“We need to improve the speed on passing measures, which is why we’re asking for the delegation of powers with the idea to, one, boost public and private investment and, second, make some changes in economic and financial management.
“The most important thing is that we currently have an important backlog of projects that unfortunately are not advancing due to bottlenecks [in Congress],” he told the assembled audience.
Last summer, watchers were shocked by how fast the country’s online gambling bill was approved, even calling it a Frankenstein law that was cobbled together in the middle of the night.
But Contreras made it clear that speed is of the essence to aid economic recovery, particularly as he noted that he understands his government is interim.
Contreras emphasised that his ministry understood that much of the social and political troubles of Peru came from financial problems.
“We’re obsessed with the idea of closing the social gaps in Peru,” Contreras finished. “This social conflict that we are seeing is mainly because unfortunately the state didn’t invest enough in the regions. Also we have the problem that the decentralisation process didn't work in Peru, because we provided resources to the region but we didn’t improve the capabilities of the region to use those resources.”
Ousted President Castillo signed the gambling bill into law on August 15. The text established a headline online gambling tax rate of 12 percent of gross gaming revenue, which will effectively be 10 percent after allowed deductions for maintenance costs.
The Ministry of Foreign Trade and Tourism (MINCETUR) most recently closed the window to hear feedback on the published draft regulation to govern online gaming and sports betting on December 2.