Economy: Income tax and withdrawal of 100% of AFP in the sights of the Com

Updated 08/12/2020 at 10:36

A few days ago, the Consumer Defense Commission of Congress approved a bill that seeks to allow AFP affiliates to withdraw 100% of their funds. With seven votes in favor and one abstention, the text was given the green light.

Now, this legislative initiative will also be debated in the Economy Commission (they voted unanimously in favor). Although initially it had not been considered in this commission, the member congressmen requested that bill No. 5674 be derived.

What is the project about? Affiliates will be able to withdraw 100% of their funds if they do not register contributions for more than 12 consecutive months. In these cases, the funds will be disbursed in three parts: 34% within a maximum of 10 calendar days after the request is made, 33% within 90 days after the first disbursement, and 33% within 90 days of the second disbursement.

At the time, the AFP Association spoke out against this initiative because – it pointed out – a massive withdrawal of the funds of these affiliates, would have as a consequence in the Private Pension System the gradual destruction of pension savings and implications in the national economy : About 3.7 million people would be left without real coverage to face old age; an approximate outflow of the pension fund is calculated S / 62,000 million (41% of the pension fund); the profitability of affiliates who do not withdraw their funds will be adversely affected by the need to rebuild the investments of the AFPs.

This would not be the only project that will be in the hands of the Economic Commission. The parliamentarians of said commission also requested that legislative initiative No. 5081, a law that creates the income tax, be derived. The text states that the tax rate would be divided into three scales: profit of more than S / 10 million to S / 50 million, the tax rate would be 1%; from S / 51 million to S / 1,000 million, the rate would be 2%; and from S / 1,000 million to more, it would be 3%.

It should be noted that in April, when the country was in a total rigid quarantine, the President of the Republic, Martín Vizcarra, announced that he would request legislative powers on tax matters, and that the Government was evaluating the creation of a tax on wealth or those who the more they earn; however, this proposal remained on standby.

-Projects pending debate-

The congressmen approved that the Economic Commission also discuss the project that creates the law to protect consumers of financial services against usury in the collection of fees and commissions; and the initiative that creates the law that prioritizes effective payment for Fonavi contributors, as a vulnerable population in the face of the State of Emergency.

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