Peru’s government plans to issue next week the first in a series of decrees aimed at accelerating infrastructure investments and boosting economic growth, Finance Minister Alfredo Thorne told LatinFinance in an interview.
The decrees are part of a package of special legislative powers that Congress approved in September, granting President Pedro Pablo Kuczynski wide-ranging authority to rule by decree on certain issues for 90 days.
The measures cover tax reforms, infrastructure projects, the creation of an infrastructure fund and a tax amnesty on undeclared earnings overseas, among other planned moves. Kuczynksi hopes the steps will help lift economic growth to 5% or higher beginning in 2018.
“We expect that next week we’ll be able to issue a large package of measures that will include public-private partnerships [PPPs] and public works projects,” Thorne said. “We are implementing some changes, hoping to add some dynamism to public investment.”
Thorne said the government also plans to name a new executive director of ProInversión, the government’s investment promotion agency. Earlier this year, Thorne told LatinFinance that the government planned to revamp the agency and model it after similar agencies in Canada, New Zealand and Australia. “The idea is to help fuel an infrastructure boom,” Thorne said.
The measures are also expected to include a cut in Peru’s sales tax from 18% to 17%, along with plans to launch a tax amnesty program in an effort to spur domestic investments. Thorne said the program would be modeled after Chile’s tax amnesty program, which captured some $1.5bn last year. Argentina and Brazil have also recently carried out tax amnesties.
The series of decrees, which will be issued between now and the end of the year, will also implement changes to fiscal transparency rules and put in place steps to increase Peru’s tax base.
Thorne also said the government is also close to finalizing a contract with Lima Airport Partners to move forward with a planned $1bn expansion of Jorge Chávez International Airport. “We have negotiated all the contract addendums. Now we just need to sign it,” he said.
Lima Airport Partners, which is partially owned by Germany’s Fraport, will build a new runway and a second passenger terminal at the airport as part of the investments.