"Every sol [Peruvian currency] recovered could translate into more production, more jobs, investment, and development for our regions," said Peru's Minister of Production.
Photo: Produce.
Peru's Ministry of Production (Produce) announced this week that more than 3,000 licensed fish farmers will benefit from the implementation of the IGV (general sales tax, an indirect tax of 18%) refund for aquaculture provided for in the Law on the Promotion and Strengthening of Aquaculture in Peru (Law No. 31666), which, following its approval in December 2022, had not yet been implemented.
Effective as of January 2023, Law No. 31666 seeks to promote the sustainability and competitiveness of the Peruvian aquaculture sector through the creation of a financing program and accelerated depreciation, as well as the application of tax benefits such as reduced income tax rates based on the taxpayer’s income level, or the early recovery of the general sales tax (IGV) for aquaculture activities.
However, more than three years after its enactment, these tax incentives—provided for in the Law on the Promotion and Strengthening of Aquaculture in Peru with the aim of promoting sustainable aquaculture of fish, molluscs, and algae, ensuring environmental preservation, and creating jobs—had still not been implemented.
With its implementation, nearly 3,000 licensed aquaculture producers will now be able to recover the tax paid on goods, inputs, and services related to their operations. According to Produce, this tax benefit—applicable to the 2023, 2024, and 2025 fiscal years—will help reduce operating costs, improve liquidity, and strengthen working capital for these farmers during that period.
According to estimates by Peru's National Superintendency of Customs and Tax Administration (SUNAT), the IGV refund could provide a cash injection of between PEN 400 million and PEN 500 million—which is between USD 116 million and USD 145 million—for Peru's aquaculture sector, bolstering working capital, operational continuity, and investment decisions.
Accordingly, projections prepared by the tax authority suggest a positive impact on infrastructure modernization, the purchase of supplies, the expansion of cultivation, and the scaling up of aquaculture operations, thereby strengthening the competitiveness of strategic supply chains such as trout, tilapia, shrimp, paiche (Arapaima gigas), and scallops, among others.
Commenting on these tax refunds, Peru's Minister of Production, César Manuel Quispe Luján, stated that this is a high-impact tax incentive that makes being licensed a tangible advantage. "Every sol [the sol is the Peruvian currency] recovered could translate into more production, more jobs, investment, and development for our regions," he said.
Finally, Peruvian authorities emphasized that with this initiative, both SUNAT and Produce are reaffirming their commitment to a more modern, formal, and competitive aquaculture sector that creates opportunities for thousands of families throughout Peru.
Despite the successive changes in government that the country has experienced in recent times—and we will soon witness yet another, as Peru is in the midst of an election cycle—the various ministers who have headed the Ministry of Production have remained committed to the sustainable development of the productive sectors, particularly fisheries and aquaculture.
This has led to measures such as the establishment of fishing quotas for key species like anchovy and jumbo flying squid based on strict scientific criteria; the reduction of red tape in fisheries and aquaculture environmental management; or the strengthening of sustainable management of marine macroalgae, among others.