(Bloomberg) -- Peru’s government is seeking to take a larger slice of top salaries and stock market profits, and eliminate benefits enjoyed by the rich such as tax breaks for yachts, Finance Minister Pedro Francke said.
The government will seek congressional approval for a bill to raise the amount paid by the wealthiest Peruvians in the interests of justice Francke told reporters on Thursday.
People who earn more than 300,000 soles ($75,000) per year should expect to pay more under the bill sent to congress, Francke said. Peru’s top tax rate of 29% on salaries is low by regional standards, he added.
The government also wants to raise the levy on capital gains, since it is unjust that stock market profits are taxed at a lower rate than workers’ salaries, Francke said.
Francke said the sight of $150,000-$200,000 cars “stings” his eyes, and said the owners could pay “a little more”. Yacht owners could also contribute more, he said.
The government of President Pedro Castillo took office in July pledging to boost spending on health and eduction and improve conditions for the poorest citizens. The government expects to boost tax revenue by 1.5% of gross domestic product per year though the bill, Francke said, without elaborating. The draft bill has been sent to congress, but hasn’t yet been approved.
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Francke said Peru won’t create a new mining tax but would instead seek to raise the existing levy on profits from mining operations. The bill will also seek to tax streaming services such as those provided by Netflix Inc.
Peru’s fiscal deficit will narrow to 5.4% of gross domestic product this year, from 8.3% last year, according to the International Monetary Fund.
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