April 30, 2014

 

Peru's aquaculture companies to pay higher taxes on lower tax benefit

 

 

Peru's aquaculture companies will have to pay higher income tax, since the new promotion and development act of the aquaculture sector will no longer include the payment of the tax benefit of 15% of the tax, instead of 30%.

 

This was announced by deputy minister of fisheries, Paul Phumpiu, who argued that "the tax benefits can be a relief but it will not boost the aquaculture industry." In this sense, it is stressed that the aquaculture encouragement will not come from the fund that makes it possible to carry out research in the sector, the newspaper El Comercio reported.

 

The official explained that it could be possible to assess the imposition of a lower tax rate for the sector, but it would be higher than the 15% that they had been paying until last year.

 

The Fisheries and aquaculture committee president of the Association of Exporters (ADEX), Humberto Speziani, considers that this increased tax burden will slow down the investment in the sector. In this regard, he estimated that the sector could concentrate investments for US$100 million if the tax and the legal stability conditions were met.

 

"Some say that the previous act did not work, but the time has changed. The only way for fisheries to grow is aquaculture," he stressed.

 

Phumpiu estimated the country needs an investment of about US$118 million to boost aquaculture. Of that amount, it would have to allocate US$26 million to sanitary issues, US$12 million to implement landing docks and about US$50 million to supervision.

 

In addition, he said that an important figure is needed for research, reported the agency Andina.

 

However, the deputy minister admitted that it is necessary to resolve bureaucratic problems, particularly regarding granting use and control rights over the areas that are not used, constituting a dead capital.

 

As it was detailed, the aquaculture record indicates that there are 27,000 hectares that are allocated, while further 132,000 hectares are not in use and with little investment, they may be exploited.

 

Referring to the situation of the Peruvian aquaculture, Fisheries and Aquaculture Officer for Latin America and the Caribbean of the FAO, Alejandro Flores, during a recent visit to Peru stated that "it has a significant non-developed potential" and requires "a greater boost" by the Executive, Gestion reported.

 

"Aquaculture is quite recent in Peru, and on the other side in the last 20 to 30 years, aquaculture has taken off in many other places because the environmental conditions have given way to the development of certain species, which did not occur in Peru," he pointed out.

 

He added, "Everywhere incentives are needed when it comes to promoting an activity."

For Flores, the main objectives are to improve technology in aquaculture production; and provide signals to investors in stability, clear rules, administrative simplification and legal certainty.

 

"I think those elements are already underway in Peru but surely there is a lot to do as in many other countries," he concluded.