Debate in Peru on tax incentives and their impact on construction.

In the economic and political context of Peru, the debate over tax incentives and their impact on the development of the construction sector has gained significant relevance. Over the years, this issue has sparked conflicting opinions among various ministries and sectors of the population. On August 11, the Minister of Economy and Finance (MEF) expressed his opposition to tax incentives, suggesting that such measures could create distortions in the Peruvian economy. This statement resonates with the MEF's historically cautious approach to policies that might disrupt the country’s fiscal balance. Minister Carranza's concern centers on Peru's economic situation, a country that, despite some progress, continues to face significant challenges in terms of poverty and inequality. "Peru is still very poor, and solidarity is needed to reduce poverty," he stated, emphasizing the necessity for more equitable approaches that do not necessarily involve tax benefits for specific sectors. This statement raises a dilemma: should the government prioritize measures that favor the business class at the expense of the most vulnerable sectors? On the other hand, the Minister of Housing, while reiterating the importance of tax incentives for the construction sector, opens a debate about the viability of such proposals in a context where the need for affordable housing and infrastructure development is urgent. The contradiction between both ministries highlights the tensions within the cabinet and the lack of a cohesive approach to economic development. While some advocate for measures that encourage investment, others are reluctant to take steps that could compromise fiscal sustainability. Ten years ago, Peru's economic situation was already showing signs of deceleration, affecting various socioeconomic strata unevenly. In 2014, it was reported that socioeconomic segments D and A/B were the most affected by this deceleration, in contrast to segment C, which seemed to feel the impact less intensely. The variability in the perception of economic well-being among different groups underscores the need for public policies that consider the diverse realities of the Peruvian population. At that time, the approval ratings of President Ollanta Humala and his cabinet presented a mixed picture. While some ministers, such as the Minister of the Interior, saw an increase in their popularity, the general perception of the government's management remained lukewarm, with 49% of the population rating it as average. This situation reflects a cycle of distrust that, in a sense, has been perpetuated over the years, where promises of economic improvements are often frustrated by the realities of informality and persistent poverty. Today, in 2023, Peru's economic situation remains complex, with 13 bills that could increase employment costs generating concern among experts and businesspeople. The current discussion focuses on regulating access to profits for outsourced workers and modifying the probation period. However, many analysts suggest that these initiatives do not address the larger issue of labor informality, which affects a large part of the Peruvian population. In this context, the need for a comprehensive approach that takes into account labor market dynamics and citizens' living conditions becomes crucial. Employment regulation, while necessary, should not be an end in itself, but rather part of a broader strategy that includes the formalization of the economy and the creation of decent jobs. The debate over tax incentives and other economic measures highlights the interconnection between fiscal policy, social development, and the overall well-being of the population. Peru's recent history teaches us that economic decisions must be carefully weighed, considering both their immediate effects and their long-term repercussions. In conclusion, the dilemma surrounding tax incentives and labor regulation reflects the ongoing search for a balance between economic development and social justice. The government's task is complicated, but it is essential that the decisions made are inclusive and sustainable, prioritizing the well-being of all Peruvians. Peru's economic history is full of lessons, and it is crucial that current leaders learn from them to build a more prosperous and equitable future.