Fissures in government: PM versus MEF

20 May 2018

Policy disagreements are emerging at the heart of government with Prime Minister César Villanueva last week publically overruling Economy Minister David Tuesta over tax policy. Tuesta had previously expressed the need to widen the tax net, but was subsequently put in his place by Villanueva who ruled out trying to tax lower-income earners.

The row comes as the government prepares to put before Congress a number of policy goals for which it wants to secure special legislative rights from Congress. These are likely to include fiscal measures. The Ministry of Economy and Finance (MEF) is looking for ways to reduce a growing fiscal deficit.

On a previous occasion, back in 2014, Villanueva (at the time the prime minister under President Ollanta Humala) resigned having been snubbed by then Fist Lady Nadine Heredia over his plans to increase the minimum wage. Heredia prevailed and Villaneuva went. Will Tuesta go the same way? 

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