Confiep deploys lobby power to modify tax evasion legislation

11 March 2019

The publication by Ojo Público of letters from Roque Benavides, the head of Confiep and boss of the Buenaventura mining company, to the Ministry of Economy, appears to have struck a sensitive nerve among key figures in the business community. 

In an interview with Ramón Gálvez Marquez in La República, a lawyer on Confiep’s taxation committee said that Peru’s main business lobby organisation had no problem with the controversial Norm XVI so long as it is not made retroactive and does not violate constitutional norms. As it stands, the measure implies retroactivity to 2012. 

The correspondence cited by Ojo Público highlights the attempts by Benavides, as head of Confiep, to negotiate the detailed regulations that would guide the implementation of Norm XVI. It provides useful insights into how Peru’s business lobby organisation works when it comes to influencing government policy and/or modifying aspects of it that it does not like.

Norm XVI was first introduced back in 2012 during the Humala administration. It sought to introduce a legal mechanism by which the Peruvian state was enabled to identify and tax payments by businesses using tax havens. It has languished since 2012 owing to Congress seeking greater specificity of instances of tax evasion.

In a letter last May to the then minister of economy and finance, David Tuesta, Benavides argued that the regulations should include the creation of a ‘committee of experts’ to oversee the implementation of Norm XVI by the tax authority (SUNAT). He also suggested that there should be no retroactivity and that companies should not be fined. The letter refers to a previous meeting at the ministry involving leading corporate lawyers (including Gálvez) and the international accountancy firm PriceWaterhouseCoopers (PWC).

A reconstruction of the meeting by Ojo Público drew attention to the modifications required by Confiep in a series of meetings since last May. The regulatory framework was finally issued in September (Legislative Decree 1422), and it included the proviso that firms violating Norm XVI would be fined in proportion to the amounts of tax unpaid. It also made implementation retroactive to 2012. While agreeing to the creation of a supervisory committee, it made clear that this would include senior officials of SUNAT not private-sector lawyers.

Following this reverse, Ojo Público highlights the attempts by Confiep to rally allies in Congress. Later in September Congress created a ‘constitutional control group’ headed by the Fujimorista Miki (Miguel) Torres to analyse DL 1422. In November, this group concluded that certain aspects needed to be corrected or annulled. The group received legal opinions from business lawyers alleging unconstitutionality. On December 18, the constitutional committee in Congress, chaired by Fujimorista Rosa Bartra, approved the document demanding changes to DL 1422. This now awaits debate in Congress as a whole.

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