Global Daily Tax News, Peru Mulling Temporary Value-Added Tax Cut, (May 29, 2025)

Legislation has been tabled in Peru to lower the VAT rate for certain individuals and companies.

The proposal entails a cut to the rate of the country's value-added tax – general sales tax (IGV) – to 15 percent from the 2026 fiscal year; to 16 percent from the 2027 fiscal year; and to 17 percent from 2028 fiscal year.

The value-added tax cut would apply to individuals and businesses that are not part of a larger group of taxpayers, whether domestic or international.

However, to fund the measure, businesses will be required to pay a temporary one percentage point corporate income tax surcharge for the duration of the scheme, for the fiscal years 2026 through 2030.