CHAPTER II.

HISTORICAL EVOLUTION OF TAXATION IN THE WORLD

To outline the origin, it is necessary to refer to the origin of humanity and

to contemplate, among other aspects, religion, politics, culture, and evolution
from the different social organizations.
But about 7,000 to 4,500 years ago, something happened that would change their lives:

they discovered agriculture, so they no longer had to move from

from one place to another in search of food, so people became
sedentary, and thus the first villages emerged. The fabric developed,
ceramics, architecture, and of course, agriculture.

There were many scholars dedicated to the study of movement.

the sun, the moon, the stars, and found a relationship with the rains, droughts, among
others.

There was the necessity of the Paleolithic man to offer gifts to his God.
through gifts in kind, or sacrifices of human beings or animals; in
part, this alleviated their fears and allowed them to thank and calm the Gods,
this is how the population decided to give to the priests, who were the specialists
in astronomy, medicine, engineering and the only ones who understood these beings
divine, half of their harvest for receiving advice, called taxation
religious.

In this way, social classes emerged with the specialization of

work, some were peasants, fishermen, artisans, warriors and
priests, and the State began to be organized.

2.1. ANCIENT AGE

The Ancient Age is the stage of History that began when it was invented.
writing began approximately in the year 3000 BC and ended when
the Roman Empire ended in the year 476 AD. Among the territories
What stands out is the tax legislation that was imposed, as follows:

2.1.1. EGYPT
 5,100 years B.C., in ancient Egypt, the highest power
it was held by the pharaoh and his court. The pharaoh was, in turn, a divine being who was the

head of the political department, military defender against invasions and

he headed the administration of his territory. They had
officials, among whom the scribes stood out, who regulated the
activities such as agriculture, industry, trade and collected the
tributes.

The social division was determined by the orders of the pharaoh, and it gave
place to a broad system of taxation and public accounting for
register, monitor and control the collection among the classes that were not
autonomous and could be subject to taxation.

According to remnants of papyrus, a system was in place.

public accounting, where the collection was recorded, controlled, and monitored
of taxes. Citizens had to pay taxes to the pharaoh and also
There was a control of the tax declaration of animals and fruits.
Taxes were paid for the ownership of customs rights, tolls,
indirect taxes.

2.1.2. GREECE

It was formed 3,000 years ago, but it reached its peak 2,500 years ago.

years. At that time, there was no unified state but several cities-
each with its own government, Athens and Sparta stood out.
archon was the person belonging to the aristocracy, the leader who managed
The treasury and through its auxiliaries collected taxes. The
taxpayers were organized into categories, given that those who
they had to pay an even larger amount. In the case of the poor,
these were excluded from direct taxes. With the taxes,
they were paying the government officials and the legislative powers
judicial, military expenses and public works were promoted, and the sciences were encouraged

the arts.

Due to the struggle against the Persians, the Greeks organize themselves to

in such a way that mandatory taxes are levied to sustain the fight.

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 2.1.3. ROMA

It was founded in the year 753 B.C. The Roman Empire took from the
Greek and Etruscan institutions, culture, social organization and the
tax institutions, especially after their domination, that
it converted defeated regions into provinces, among which stand out
Egypt, Greece, and Judea. One of the causes that led to the fall of the Empire.
Romania was the political corruption and high taxes, especially
about agricultural production. Julius Caesar, declared lifelong dictator,
he reorganized the state and gave the questors (tax collectors),
the function of collecting them; these taxes were collected throughout the
empire, the payment was made in coins or in kind, where countries like
Sicily and Egypt supplied wheat to the Roman state, which in turn
it provided this cereal to the people of Rome for free.

They conducted censuses to know the lands and the heritage of the
citizens and in this way apply the taxes. There were taxes.
direct taxes like those on inheritances (5% of inheritances and other donations)
and indirect taxes such as customs duties and sales taxes, and rates
special indirect taxes (for example, 45% on the value of the slave).

2.2. AVERAGE AGE

In the Middle Ages (Year 476 to the year 1453 A.D.), Christianity was
considered the one and true religion. Charlemagne, crowned emperor
by the Pope, imposed in the year 800 the 'crusades,' military campaigns to
impose the faith.

The Church, as the dominant power of the time, had its own
tax institutions. The economic system was Feudalism, a means of
production based on agriculture, little commercial activity and scarce
monetary circulation.

In this era, the essential instrument was the land, where it prevailed as
owners, the nobility, and the Church. The feudal lords were the ones who imposed
onerous taxes which they would later transfer to those they recognized as
king. The landless serfs initially paid their tributes in money,

3
later in kind with the fruits of the land and personal work. In this
at that time there was no market economy, the little trade was consolidated in
through barter. In the year 1215, the 'Magna Carta' of England stipulated the
tribute that the nobles had to pay; other known tributes of the time were:

a) 'The Taille', an old feudal tax that was applied to presumed sales in
France. As a direct tax, it is collected personally.
The process of imposing was called tallación. The taille was one of the
main taxes of the Old Regime in France, and considered
as very regressive, since the privileged are precisely exempted, the part
richer of society.

b) "The centenary", created by Philip IV the Beautiful (1285-1314), applicable to

land performance. The denier is an ancient French coin,
equivalent to 1/240 of the pound. For its part, the centième denier was a
real tax, established in 1703, equivalent to one hundredth part
(1%), applicable to all transfers of real estate (possession or
usufruct) whether by inheritance or by donation through contract of
marriage.

c) 'The fifty-fifth', burden on wealth and income.

d) 'The cadastre', from the year 1427 in Florence, Italy.

It should be considered that in the Middle Ages, there were no foundations or systems.

Tributes elaborated. The king lived off his heritage and the tributes and each
ruler, like the Feudal lord, created the taxes he deemed appropriate
convenient.

2.3. CONTEMPORARY AGE

With the French Revolution (1789), the Contemporary Age begins.

and the tributes are part of the time.

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 In England, with Napoleon Bonaparte, the Income Tax is born.
(1797) with a scarce collection of the import tax (because those who
they were supposed to pay it but they did not do so or put up resistance to fulfilling this duty.

This event triggered an increase in the consumption tax of

spirits, medications, tea, soap; in addition to the tax that was charged for the use
of cars, horses, dogs, watches, among others.

In France, with the Revolution, all taxes are abolished and new ones are created.

four old contributions, known as 'les quatre vieilles', they

son

a) The territorial contribution that taxes land and buildings.

b) The property tax that is the tax on rental values of

housing, considered as an income index.

c) The patent contribution that taxes trade, industry and the

liberal professions.

d) The contribution from doors and windows, which was paid according to
to the number of openings in the buildings.

2.4. OTHER COUNTRIES RELATED TO THE HISTORY OF TAXES

DURING CONTEMPORARY TIME

1. Germany; a federal organization where income tax prevails, divided

in two parts, one for societies and the other for individuals
natural.

2. Italy establishes the property tax on real estate, land, and buildings, the
agricultural tax and the progressive complementary (year, 1923).

3. Spain has undergone a transformation over the years towards the

tax modernity, moves from taxes to the product and from the
territorial, industrial, and trade contribution to finalize its structure
taxation on corporate and personal income tax
natural (Law 230 of 1963).

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 4. The United States derives part of its revenue from indirect taxes, or
to consumption, but it is not enough so that, in 1914, with the authorization
the Congress establishes the Income Tax or 'Income Tax', which
solves the main source of resources for the Federal State.

CHAPTER III.

BACKGROUND AND HISTORY OF TAX LEGISLATION IN THE

PERU

3.1. INCA STAGE

6
 It manifested as part of the warrior spirit that has been permanent in
the human being since its origins since our ancestors achieved
surviving thanks to hunting, fishing, and gathering, living in groups of
one or more families, in our case the so-called ayllu.

3.1.1. RECIPROCITY:

It is the socioeconomic organization through which the members

from the ayllu provided their labor for the production of goods in favor
from a family, the curaca or the inca. In this way, goods are produced in
the entire realm of Tawantinsuyo, where money was not known,
market or commerce and below are detailed the two forms of
Andean reciprocity

3.1.1.1. Symmetrical Reciprocity.

This reciprocity takes place when a family

uses the energy of its members in favor of another family or
a neighbor. For example: helping to cultivate the lands,
to participate in the roofing of a house or to be involved in its care

from the herd. The family that receives this help, in another

opportunity returns similar jobs. This way of

the mutual labor provision is called ayni or
reciprocal help, solidarity with the participation of men and
women.

The benefited family serves him in gratitude.

food, drinks, and some handfuls of coca. So that
it is not just a simple service provision, a job of
brotherhood, it is an implicit agreement of interests and
family conveniences of giving, with the hope also of
to be reciprocated.

3.1.1.2. Asymmetric Reciprocity

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 It was carried out when the community worked at
favor of the community or the State, expecting little or nothing
in compensation. In these cases we are faced with two forms of
work: the minka and the mita.

a) The Minca or collective work. The ayllu delivers its

work energy in problem-solving that
affect the community. Such is the case of the channels of
irrigation y care of the platforms,
construction of bridges, raising of temples and others
important works. Families participate in these tasks.
bringing their own instruments, food, and drinks. From
similarly, the agricultural lands that belong to the
orphans, widows, are worked without expecting anything in return

remuneration. The same happened when one went to work at the

lands of the curacas and nobles of privilege.

b) The Mita. It is the mandatory work that every individual of 18

At 50 years of age, he had to contribute to the State in the crops.

of the lands of the Inca and the Sun. It also includes the
execution of public works, such as the lifting of
fortresses, exploitation of mines and laundries and
different personal services, such as messengers, storage houses,

bridges, roads, and army levers.

They didn't all work at the same time, but in shifts. By

On the other hand, there were specialists who were dedicated to the

silverwork, goldsmithing, upholstery, featherwork,

dancers, musicians, carriers, etc., but that do not
they were disengaging from their agricultural work.

3.2. COLONIAL STAGE

3.2.1. TAX SYSTEM

It was quite complex during the Colonial period, among them

we have:

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 The Tribute

Main tax paid by Indians aged 18 to 50

for being vassals of the King of Spain. It was paid in kind or in
money and its collection was the responsibility of the curacas who in turn

delivered the collected amount to the corregidor. The only exempted from this

the tax were the noble indigenous people, the outsiders, and those
ethnic groups that collaborated with the conquerors.

2. Tax of the fifth real

Established on the production of the mining centers that

They had to pay 20% of the production to the King.

The tithe

Tax that affected landowners and owners of

estates, which for being faithful had to pay the church 10% of
its agricultural production.

4. The treasury

Customs duties that were paid on products from

export and import that left or entered the Viceroyalty of
Peru.

5. The alcabala

Tax on the sale of real estate, personal property, and slaves

what the seller paid.

6. Tax on sisa and mojonazgo

They were municipal taxes, collected by the councils in the

markets.

3.2.2. ECONOMIC INSTITUTIONS

a. THE ENCOMIENDA

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 Considered as the first and most intensive system of
exploitation. It consisted of the awarding of hundreds of
indigenous people who had to pay tribute and provide personal services
to a certain Spaniard known as 'encomendero'. In turn
the encomendero was to provide protection and Catholic indoctrination to
sus "commissioned".

THE MITA

It consisted of the indigenous populations providing the

6th. A 7th part of their tributary men, who
they were required to go to work at the places
marked by the government.

c. THE YANACONAJE

Yanaconas were the workers of the lands of the

haciendas and estates, in exchange for their labor force
they were exempt from paying tribute, which was paid by their
amos.

3.3. Viceroyalty

The taxes imposed during this time were:

Tithes and Cobos (formerly Real Fifths) of Gold, Silver, Copper,

Mercury, Tin, Iron, Lead, Brass, Sulfur, Saltpeter - This tax
existed until 1735, applying a fifth on mining production.
Starting in January 1735, the fifth became the tenth, (from where it took the
denomination of tithes). The Cobos was a tax of 1.5%
intended for the tester by the last name Cobos; when the tax is passed to the treasury,

the former beneficiary was granted a marquisate, in compensation.

2) Treasures and Huacas: It corresponded to half the value of the treasures

buried, or found in the ancient tombs.

3) Seigniorage or Coinage Right – Established in 1603,

The payment of 3 reales for each minted silver mark was important.

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 4) Tobacco Shop: Established in 1573, it involved the rents.
coming from this state monopoly.

5) Vacant and Abandoned Goods: Based on the Pontifical Bull of

Alexander VI, (May 4, 1493), is the property right that belongs to the
king over the property whose owners have not claimed them.

Customs duty or Customs rights: It is a customs tax.

Initially: 10% on imports and 2.5% on exports. The
export was released in 1778.

7) Navy Breakage: Tax created on imports, for

to raise funds for the Southern Sea Navies; it ceases when it
abandon the system of fleets for free trade.

8) Land and Sea Traps: This income refers to those that are set.
for reasons of war, to the enemies.

9) Alcabalas and Union of Arms: This tax was applied to all kinds
of transactions. The party obligated to pay is the seller or the heir.
transversal.

10) Sellable and Renunciable Offices or Rights of Inheritance: Refers to

the trades that are granted by sale at public auction.

11) Seizures: It is the confiscation of goods related to irregular sales;

they generally refer to those taken for the reason of smuggling.

12) Chamber Penalties and Court Costs: It applied to those who

they became creditors of fines for offenses committed

Crown Encomiendas: They are the product of the encomiendas.

real estate, which were not granted to any private person. When a
the encomienda ceased to have a legitimate heir or when it was extinguished
rights of the beneficiaries. It was also called "Thirds of
"Encomiendas" and "Medias Encomiendas" to which the crown collected the
to appropriate a part of the income from the encomenderos.

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 14) Taxes: Since the beginnings of the colony, the 'Tribute' was established.
Indigenous," by which they were obliged to pay 5, 7, 8, and 10
pesos per year, plus 1.5 reais for hospitals. In fact, this was the
main income account of the viceroyalty. When it became very large the
phenomenon of the proliferation of the yanaconas, it was extended to them their

application; and by the end of the 18th century, the tribute was extended to the castes
(mestizos, mulattos, etc.)

15) Sale and Composition of Lands: Like the kings of Spain

they held the primary ownership of all American lands, they could
grant them or sell them; it is to this sector that all the income went for
sale of lands or by composition of the same.

Snow and Aloja: The exploitation of snow and aloja was exclusive to
State, which granted it in concession, and that rented annually 8 thousand
pesos in favor of the public treasury.

17) Salinas and Saltpeter: This income came from the net product of the
exploitation of the salt flats of the viceroyalty, which according to the legislation

Castilian ones were state-owned.

18) Pulperías: They were understood as 'stores, inns, or taverns'

where some maintenance items are sold such as wine, bread, honey,
cheese, lard, oil, bananas, and other bits and pieces"; each city had
a limited number of those that could be opened, paying a tax
variable amount annuity.

19) Tobacco Monopoly, Solimán and Pepper: Established the monopoly of

tobacco around 1752, the income it produced was recorded in this item.
In the Soliman section, the income from the tax was recorded.
the use of luxury or superfluous goods; in the case of pepper, this was the case.
own.

20) Entry Rights for Blacks: For the importation of each slave
It was mandatory to pay 2 pesos, charged to the beneficiaries of this.
traffic.

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 21) Vicuña Wool: This tax was applied to the exports of this.
fiber, from the ports of Peru to those of Spain.

22) The Vineyards: This tax was applied to products from the vineyards, in a
2 percent of its market value.

23) Sealed Paper: established in 1638, it refers to those coming from the
sale of the official papers that were issued by the State so that in
they made the contracts, deeds, applications, orders, provisions,
etc.

Ecclesiastical Tithes: It corresponded to the tenth part of the

produced by the earth or industries and whose purpose was the
support of the Church. By virtue of the royal vicariate, this tax is
the king charged to distribute it in the following way: 10% for the
excused, (construction of temples); the remaining 90% was distributed as follows: the

3% for the seminars, 25% for the bishop or the archbishopric, 25% for
the ecclesiastical council, the remaining 5% was divided into 9 parts, two of the
which were destined for the treasury, four for the priests, one and a half for the

hospitals and the last one and a half was allocated to sacristy expenses and
construction or repair of churches.

25) Major and Minor Vacancies: It came from the income that was left behind
to charge the clerics, for having vacated the position or for not having been provided

yet.

Crusade: It came from the sale of copies of the bulls of the Holy
Crusade and Dairy Products. He was in charge of the administration of this income.
the Court of the Holy Crusade and the Superintendency of the Branch. The
purchase of indulgences from the Holy Crusade absolved from all crimes and faults,
(with the exception of homicide), provided that the amount paid
corresponded to the magnitude of the transgressions. The bulls of the
dairy products granted the buyer the right to consumption of
prohibited foods during Holy Week, etc.

27) Ecclesiastical Stipend and Half Anata in General: The stipend

the ecclesiastical was established in 1626 and is the payment of one month's salary that

13
 the beneficiary of an ecclesiastical appointment was paid. The half annuity the
those who received a commission or some large estate were paying,
they bought a noble title, those who benefited from the pardon, etc.;
this payment was equivalent to half the rent of any of those
I had for a year.

28) Azogues of Huancavelica and the Foreign: The income from this
revenue came from the sale of mercury to the miners engaged in
benefit of silver.

29) Other Income: The Royal Boxes also had other sources of
income such as postal rents, rents from temporalities,
(of the property of the Jesuits who had been expelled during the
Viceroyalty of Amat, funds, head tax, boundary markers of
spirits, lotteries, cockfighting arenas, deposits, censuses, hospitable services
and many others.

30) Extraordinary Revenues: Loans, Donations, and Contingencies.

for each request, the viceroys turned to entities and individuals, (with the
offering of favors and gifts), from those who collected the money
from this origin.

3.4. THE REPUBLIC

Throughout our republican history, we have gone through periods of

political and economic instability.

He had difficulties managing the public treasury. There was a delay.

coming from colonial management and there were no men prepared to take it to
cable. In addition, the collection of funds was in the hands of the
local governments, which charged taxes that not even Congress had
knowledge. This was accompanied by the moral relaxation that originated with the
administrative disorder. In the beginning, there wasn't even an office where
concentrate the account of the revenues and expenditures of the national treasury.

In 1830, an attempt was made to implement double bookkeeping, but it had the support of the

resistance of local offices. However, it was applied incompletely.

14
Direct contributions were regulated since 1826 and 1828; thus
as the role of prefects, sub-prefects, and administrations with their
obligations and tasks. This regulation was officially established in 1829.
The office that centralized the Tax Administration was the Supreme Court of
Accounts.

The Supreme Audit Institution, an institution derived from the Viceroyalty, was a
office in charge of the examination and judgment of the accounts that were to be submitted

all the administrators of state revenues. It had a dual function; for

on one side, he managed the estate and kept track of the income and expenses; for
another one was in charge of judging the accounts of the subordinate offices.
Subsequently, the General Accounting Office of Securities operated, but the law
promulgated in 1840 it reestablished the Higher Court of Accounts.

During Ramón Castilla's first government, the General Directorate was created.
of the Treasury (1848). The purpose of this Directorate was to centralize the results
of the collection in the responsible offices. Furthermore, it was in charge of the
redistribution of resources. Thus, the Court of Audit became the body
fiscal and of judgment of the accounts and the regulation that governed the
Court until 1875.

3.4.1. MAIN TAXES OF THIS TIME.

The taxes collected during this period can be divided into

direct and indirect. Below are the main ones:

3.4.1.1. DIRECT TAXES

They were the ones who affected the people, the properties, the
industries and patents.

Direct taxes affected all citizens of the

emerging Republic, but not in the same way. It was made
difference between indigenous taxation and that of castes. Moreover,
there were also taxes on properties, industries, and patents.

indigenous tribute

15
 It was the most important tax of the fiscal organization in the
viceroyal treasury. With the uprising of Túpac Amaru, it suffered a
increase, then it was abolished in 1808 and was reintroduced in 1815,
as a punishment for the uprising of Mateo Pumacahua.

In the time of Independence, the indigenous tribute reached

to be abolished again, by decree of August 27, 1821. Without
embargo, the decree of August 11, 1826 reinstated it. The
indigenous people were willing to pay the tribute, but they requested that
no other tax was charged to them. In this latest decree,
it also stipulated the taxation of other Peruvians,
called tribute of castes.

When Bolívar took command, he decreed in 1825 to level the

indigenous people with other citizens in tax matters,
ordering to pay everyone the same tax rate. This was ratified
by the law of November 3, 1827. But it stumbled upon that in the
new republic, it was not thought that everyone were citizens;
Furthermore, the idea of Peruvian identity or of Peruvians was identified

purely with the indigenous.

The indigenous tribute has just been abolished, definitively,

during the government of Castilla in 1855.

b) Tribute of castes.

The contribution of castes included the personal tribute of the

workers and those with an annual income. In 1842, it
they referred to this tax as obligatory for all those required to comply with it

who were not indigenous, being considered as day laborers and

being compelled to pay the treasury three pesos and four reales for
year.

However, the contribution of castes was abolished by the Law

approved by the Congress of Huancayo and promulgated on the 25th of

September 1840. The reason that supported this decision was that
that tribute fell on miserable people, whose resources

16
 they were only enough to hold on and then they could do nothing
contribute to the State;

c) Buildings.

The value of the properties was assigned by their product, not

they had value in themselves. Initially, all kinds of
buildings (urban or rural) should contribute annually with 5% of
the utility of its lease, but then it was reduced to 3%. This was
decreed on March 30, 1825.

There were problems with its collection and rural properties.

they were exonerated in consideration of the atrocities of which
They were the object of the montoneros. The law of 1840 that abolished
the contribution of castes, stipulated that the landowners
rustic or urban lands that did not possess more than one estate and whose income

annual did not exceed fifty pesos, were free from the
property tax. Various decrees increased or decreased
slightly these figures.

Once again, the indigenous tribute supported the treasury.

majoritively.

d) Tax on industries and patents.

The other direct contributions were those that were applied to

the industries and the patents (the latter is the one that finally is
it imposed a 3% tax on the product of the
industry or capital obtained through its exercise. The
The collection of this tax was only possible in the capitals of
department and cities whose population would justify it (which already
reduced its tax base.

The patent contribution was aimed at those who

they dedicated themselves to commerce, art, or any industrious work. But
those who paid the caste tax were exempt from
she.

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 3.4.1.2. INDIRECT TAXES

These were numerous, but undoubtedly the most important was the one that
entered for customs purposes. This tax underwent a series of
difficulties and obstacles, mainly due to the great smuggling of the time,
notably affecting the treasury.

In fact, the tax that was levied on the import of certain products,
that harmed national agriculture and industry, amounted to 80% in
tariffs. Other products were taxed at 30%. The others
indirect taxes were a legacy of the viceroyalty.

Starting in 1840, the State began to collect the revenue from

from the export of guano. With this boom, taxation was abolished as well
direct and indirect. So, Peru was the only country in the world
which practically based its income on a single product: guano.

3.5. TAXATION IN THE 20TH CENTURY

3.5.1. TAX SYSTEM FROM 1900 TO 1990

At this stage, the economic history as a Republic is marked

for intense but brief moments of growth and separated by
periods of transition and uncertainty.

Starting in 1890, a slow but steady growth begins

our economy. Exporting sectors are diversifying, since
We need to replace guano and saltpeter. There is an economic development.
autonomous along with a dynamic expansion in capital goods and
technological capacity.

But then it stagnates in a family management of the economy,

highly dependent on foreign capital and market and, ultimately, by
having the entire economy focused on exports, without the capacity to
dynamize the other sectors of the national economy. All of this led to
make it impossible to achieve self-sustained development throughout this century.

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 The export products that had the greatest growth between 1890 and
1930 were (according to the order of importance): sugar, cotton, the
wool, rubber, copper, oil, and silver. The control of exports
(at the beginning in national hands) was not so important in itself as the
dependency on the international market and its effects on the economy
national.

From 1930 to 1948, Peru was affected, first of all, by the great
depression that overtook the entire international market. However, the
Peru and Colombia are the countries that are recovering the fastest from
this phenomenon. The effects of this economy are starting to be felt
export-dependent on the collapse of some regional economies.

Between the years 1949 and 1968, this model completely declined.
exporter as a driver for the country's development. But the
Indicators show that between 1950 and 1959, exports doubled.
and inclusive, from 1959 to 1961 it grew by 65%, but by 1976 the level of
exports were lower than in 1961.

For export, only mining remained (essentially copper), as

everyone else had difficulties: price problems for the
exports, the few lands for intensive farming, the limits
ecological for forestry and fishing exploitation. On the other hand,
the industry became dependent on this export sector and could not
adapt to the new changes.

For a better presentation of the history of taxation, the

we have divided into the following stages:

3.5.1.1. THE ARISTOCRATIC REPUBLIC AND THE ONCE YEAR TERM OF

LEGUÍA (1900 - 1930).

At this time, monetary and fiscal policy had as

characteristics of the consolidation of the monetary regime and gold as
patron. The state revenues and exports were developed
they had rather steady growth.

19
 However, due to parliamentary struggles, it could not be done.

to comply with the presentation of the budget in most of

these years. The country also continued to incur debt,
especially highlight the contracts with the National Society of
Collection and with the Salitrera Company of Peru.

Another flaw of this period is the continuous increase of

public budget, generated by the increase in payroll (both by
the growth of bureaucracy as well as the increases of the
salaries). So to cover these expenses, taxes are raised.
indirect taxes are created and new ones are created (such as the alcohol tax,

tobacco, sugar, and matches.

During this period, the effects of the First War were felt.
World War, with an unfavorable change for our currency.
With Pardo's government, a tax reform is achieved that relieves the
economic situation.

This reform taxed the export of sugar, cotton, the

wool and leathers; oil and its derivatives; gold, silver, the
copper. It also affected any transaction, donation, or inheritance of
goods as well as to undeveloped land and tickets for
passages. The external debt was amortized and public spending was reduced.

3.5.1.2. THE LEGAL ONCENIO (1919 - 1930)

The first tax reform plan was presented by the

Minister of Finance Fernando Fuchs. The plan included:

Creation of the National Bank.

b) Progressive tax on the export of products

nationals

c) Inheritance tax.

d) General income tax.

20
 Until then and long after the tax system
rested on the burden of rural and urban properties; the
contribution of the income on movable capital; that of industries and
patents; the agricultural, industrial, and mining utilities of
export

Based on this plan, the Bank of the Nation was created in 1820.
Its functions were: to issue checks, to regulate the
amount of current assets, regularize the budget with all incomes
fiscal and execute payments. It should promote industry and execute
public works.

In 1922, the Reserve Bank was created as a regulatory entity.

of the credit system. It was modeled after the Federal Bank of
United States Reserve.

Both banks had limited influence due to the pressures

politically exercised, the little capital they managed and the
operations were practically restricted to Lima and Callao.

Where there is indeed an important reform is in the aspect

tax: Law No. 5574 was enacted which imposed the tax on the
rent. It affected natural or legal persons, all those
who resided in the country; whether their income was generated within
or outside the national territory.

3.5.1.3. THE DIFFICULT THIRTIES, THE GOVERNMENTS

DEMOCRATIC AND THE ARRIVAL OF ODRÍA (1930-1956)

The country is entering a crisis again due to the decline

of the export products and the value of imports,
being worsened by the problem of external debt. All of this is
reflected in the fall of the currency value.

To promote agricultural activity, the Bank was created in 1931.

Agricultural of Peru. In order to promote industrial activity; in
In 1936, the Industrial Bank was created.

21
 Tax activity started to be directed from 1934,
when a department responsible for collection was established.
But the country, since guano, only collected through customs or taxes.
indirect effects on consumption, with the citizen having lost the
habit of taxation.

The definitive law on income tax was passed in the

government of Benavides (Law No 7904 of July 26, 1934). This
the law was repealed by law 8021 which modified the applicable amount, the
dimensioning systems and safety guarantees to prevent the
evasion.

3.5.1.4. DEMOCRATIC GOVERNMENTS AND THE ARRIVAL OF

ODRÍA (1939 - 1956).

Political stability was accompanied by a certain breadth.

budgetary. There were no major modifications regarding the
tax system. National reserves were sought to be created, to control the
monetary inflation and increase foreign currencies.

With the arrival of Odría, a process of free trade is established.

market, opening to the global market, without protecting the rates

changes. However, it can be noted that it was developed the
favorable international trade for our country.

It was his government, that of the great public works among the
which highlighted the irrigation works in Piura, the rise of the
road infrastructure, large school units as well as the
neighborhood units and the groups of housing intended for
employees and workers. At this time, the Hospital of
Social Security is where the foundations for this system are laid.

3.5.1.5. PRADO, BELAÚNDE AND THE GOVERNMENT OF THE FORCE

ARMADAS (1956-1979).

With the second government of Prado, minimums are set for the
income tax and export taxes are

22
 moderate, and rather low compared to other countries of the
region. Favorable moments to place our are no longer experienced
products in the international market.

Once again, it was the interests of the oligarchic groups.

who controlled the fates of the State. On the other hand, there was a living
a climate of freedom of ideas that allowed the development of parties
politicians. This brought the human issues into public debate and
economic realities of our situation, where the began to take shape the

awareness of having a government in which social organization and the

equitable distribution of wealth will reach all citizens.

The government of Belaúnde begins with elections.

unshakable. In this auspicious framework, the main measures were given.
of his government: the agrarian reform, the resolution of the problem of the
Brea and Pariñas nationalized the Deposit and Consignment Fund,
launched the Popular Cooperation and restored elections
municipal elections. But he encountered a legislative chamber
mostly Aprista and Odriista, who limited their government of
according to their own conveniences.

3.5.2. STRUCTURE OF THE TAX SYSTEM OF THE 20TH CENTURY

It should be noted that taxation has always been subject to the

modifications by the current government. These changes were related to
always with the interests that the political class had established
alliance, or failing that, the pressures were of such magnitude that the
rulers finally met their demands.

In the 19th century, we had the sturdy work of Jorge Basadre.

who provided us with the common thread. However, after the Oncenio has
It has been difficult to make a proper assessment of the tax measures implemented.
Despite this, we have managed to outline, in broad terms, the following
tax structure as well as a balance of the given tax legislation in
the era:

Income tax.

23
 b) Tax on movable capital.

c) Tax on salaries.

d) Tax on profits.

Tax legislation of this era maintained the regulation of these

taxes until 1939 were established through 13 laws, one decree law,
seven regulations and 25 supreme resolutions.

This legislation was not clear in its scope or the regulations and
supreme resolutions were correctly interpreted (often by
ignorance and others due to lack of coherence within the same regulations
in force.

3.5.3. TAXES IN THE PERIOD FROM 1962 TO 1990

Our tax system is dynamic, complex, and changing.

special characteristic of our tax structure in these two
for decades in Peru, indirect taxes are the most
important in terms of tax collection:

The following will present this historical period considering its

tax structure and the presentation of taxation in the years 1973-74,
from 1984 and 1987, to give us an idea of the income received by the
Statement of tax collection.

3.5.3.1. TAX STRUCTURE.

The Tax Structure of this period is based on the Decree

Supreme No. 287-68-HC that was in effect in the 1970s,
and in Legislative Decree No. 200 of June 12, 1981.

The main taxes of this historical period were:

a) Income Tax.

The purpose of this tax is to tax the incomes that

they come from capital, labor, or both. In addition to others.
what the law establishes.

24
 With Supreme Decree (D.S.) No 287-68-HC, given the
October 9, 1968, the identity card system was replaced
income tax on single income tax. This D.S.
was subsequently modified by Decree Law No 200,
given June 12, 1981.

Those affected by this tax were all the

individuals, whether natural or legal. Natural persons
they are individuals, the marital society, the successions
individuals and sole proprietorships, as well as the
Limited Liability Commercial Companies
(S.C.R.L.). In 1981, this was amended by eliminating the
sole proprietorships and commercial companies of
Limited Liability.

Legal entities are Corporations

(S.A.); Partnerships by Shares; associations,
cooperatives and foundations; branches or agencies of
societies established abroad; branches or agencies
individual entities from abroad; companies or entities from abroad
who receive income from a Peruvian source.

In 1981, agricultural societies are added to this list.

social interest and agricultural production cooperatives;
public companies; foundations associations communities
labor and compensation for time of services or disability;
petroleum and mining companies.

This tax is further subdivided into five

categories

1. First Category: Rental of properties. Affects rentals

real or estimated values of any property, whether urban or rural

(the latter term is synonymous with rural). The tax

it can be about gross income (on the total of the
actual or estimated income) or on net income (it

25
 establish by deducting from the gross debt according to
law).

2. Second Category: Income from other capitals. For instance

some of us have stock dividends, the
interest arising from the placement of capital
example loans); royalties and royalties; right to
patents and trademarks; life annuities and subsidies
newspapers; etc.

3. Third Category: Income from commerce, industry and

similar. Records all buying and selling activity,
production, change, and disposal of goods; to the rents
that legal entities and any others obtain
rent not included in other categories.

4. Fourth Category: Income from independent work. They are

fundamentally two. One refers to the exercise
individual or collective of any profession, art, science,
office or activities not included in the third
category. The second records the performance of functions
such as being a director of corporations, syndic,
mandatary, business manager, executors, and activities
similar ones.

5. Fifth Category: Income from employment relationship

dependency. We can also divide it in this case.
in two. The first affects earned income
staff borrowed under an employment relationship (salaries and
salaries, allowances, bonuses, incentives
Christmas bonuses, commissions, representation expenses, etc.
The second affects pensions and income from work.
personal (retirement, pension fund, life annuitiesy
any other similar income).

b) Taxes on wealth and wealth transfer.

26
 The taxes on wealth transfer are very
ancient. They affect the buying and selling of properties or when
assets are inherited (inheritance tax). They also
record the transfer of donated goods.

In the military government, a tax was imposed for the first time on

equity capital of companies and to the value of the

real estate property, both created by Supreme Decree No
287-68-HC and that has been modified by Decree Law No
19654, for the taxes on business assets and to
non-business real estate assets.

There is also a tax on undeveloped land and

the ruins of estates. With them, the aim is to build or
the properties are to be rebuilt as necessary.

Wealth and transfer taxes

patrimonial is subdivided into the tax on:

1. Business assets; this tax aims to affect the

net worth of companies at the end of the fiscal year
accounting. Includes natural or legal persons who
dedicate a a profitable extraction activity,
production, trade, industrial services, etc. The
net worth is the difference between assets and liabilities of
the companies.

2. Non-business real estate; it is managed by

local governments and taxes all properties that
the individual is located in a province, regardless of whether it is

rustic or urban.

3. Transfer of real estate for consideration; burdens all

transfer of properties and there are two taxes: the
alcabala and the additional alcabala. The first one is paid by the
buyer (unless otherwise agreed) and the second, the
seller. It is managed by the central government.

27
 4. Free transfer of assets; subject to the
inheritance or legacies as well as donations. Also
record the insurance payments. There are two: the tax on the
inheritance mass (applied in succession due to
death) and the tax on inheritance portions. It is
administered by the central government.

c) Sales tax, services, production and

consumption.

This tax is divided into two: sales tax,

services and construction and tax on remuneration for
personal services.

The first tax was created in 1972 with the Decree Law
No 19620 and comes into effect in 1973. It replaces the law of
stamps. In reality, it is a single tax as it arises when
a purchase-sale is made. In the case of production, it pays
both the manufacturer and the wholesaler; likewise in the case of
services, paid by both the provider and the recipient. In the case of
the construction applies to the total income received by the
companies formed by materials, labor and
technical direction.

The tax on remuneration for personal services

records all those who are exercised in a manner
independent.

d) Import tax.

The products brought into the country have a tariff.

set by Customs, except for special regimes of
importation established by law or in treaties, agreements or
international agreements.

The new customs tariff provided by the Decree Law

22619 of July 30, 1979, came into force on 01 of

28
 January 1980. Subsequently, measures have been added.
complementary.

e) Export tax.

The Decree Law No. 21528 and No. 21529 of June 28

In 1976, they created export taxes on products
traditional and to the internal sales of products. The prices
they are based on international quotations.

Since then, what they exist provisions

complementary such as, for example, the modification of the
tax rates, exemptions, and regimes
special (agricultural products -coffee-, oil,
mining products and their derivatives, etc.

3.6. CURRENTLY

3.6.1. STRUCTURE OF THE PERUVIAN TAX SYSTEM

The Peruvian State is the political power organized by the Constitution.

since 1993. The State is organized at three levels of
government: national, regional, and local. Each of these levels groups
different executing or producing units of goods and services
audiences whose operating costs must be financed basically
with contributions (taxes, fees, and levies).

Legislative Decree No. 771, in effect since January 1994, is

referred to as the 'Framework Law of the National Tax System'. This
norm regulates the structure of the Peruvian tax system, identifying
four large subsets of taxes based on the recipient of
the amounts collected:

29
 a) Taxes that constitute income of the national government

Cesare Cosciani1it points out that by virtue of the principle of the

counterpart the user of the goods and services offered by the
The state must fulfill a payment as remuneration or
remuneration. If a taxpayer uses the goods and services
state-owned, located in different parts of the country, must compensate to
through the payment of taxes in favor of the National Government
fundamentally composed of the Executive Power, Power
Legislative and Judicial Power.

These taxes are detailed in the Decree

Legislative No. 771. It concerns the Income Tax, Tax
Sales General, Selective Consumption Tax, Rights
Tariffs and Simplified Unified Regime.

The Income Tax taxes the income of individuals.

Individuals and businesses. The General Sales Tax taxes
fundamentally the generality of the sales of goods, the
services provided by companies and the imports of goods.

The Selective Consumption Tax only affects a few

how many sales and service operations carried out by the
companies. In terms of Tariff Rights, there is
fundamentally a tax that levies imports of
goods produced in Peru. The Single Regime
Simplified - RUS consists of the payment of a single tax that
allows to facilitate compliance with tax obligations of
the small contributors, in substitution of the Income Tax
the General Sales Tax. They also constitute resources of
1
Cosciani, Cesare.- The Value Added Tax. Buenos Aires, Ediciones De
Palma, 1969, p. 112.

30
 National Government the rates it charges for services
administrative services provided.

b) Taxes that constitute income for the regional government

In accordance with Article 74 of the Constitution, the

Regional Governments can create contributions and fees. It is about
of tax revenues for the Regional Governments that are not
contemplated in Legislative Decree No. 771.

c) Taxes that constitute income for local governments

As a taxpayer uses the goods and

services in your locality, you have to compensate through payment of
taxes, contributions, and fees that are collected by the
District and Provincial Municipalities. These taxes are not
detailed in Legislative Decree No. 771.

c.1 Taxes

In tax matters, articles 3.a, 3.c and 6 of the

Municipal Taxation Law refers to: the Property Tax
property registration tax, Transfer Tax affects
property acquisitions of land, Property Tax
Vehicle heritage affects vehicle ownership
which -broadly speaking- includes cars
even trucks and buses, the Betting Tax applies
fundamentally the income of the Jockey Club of Peru from
concept of horse betting, Tax on Games affects
the income of the entities that organize the games of
raffles, draws, bingos and pinball, as well as the prizes that

31
 obtains the winner of the lottery game; Tax on the
Non-Sporting Public Shows impact consumption
(entertainment expenses) incurred by individuals when due to
they attend the cinema or witness a musical show
modern (show of a rock band or an orchestra of
salsa); the Municipal Promotion Tax basically taxes
the sales of goods and services that are carried out
companies, as well as the imports of goods,
The Rolling Tax affects the import and sale in the country.
of fuels for vehicles e Tax a the
Recreational vessels affect yacht ownership,
sliders, etc. Laws No. 27153 and No. 27796 regulate the
The Slot Machine Tax levies income from
the organizing entities of mechanized games where
Is there a possibility of prizes for the winner and the Games?
from casinos that also constitute income from the
Municipalities affect the revenues of the entities.
organizers of board games where dice are used,
cards or roulette.

c.2. Contributions

Regarding the contributions, we must indicate that the

Articles 3.b and 62 of the Municipal Taxation Law make
reference to the special contribution of public works. No
the contribution for services is included.

c.3. Rates

Regarding the fees, Articles 3.b and 68 of the Law

Municipal Taxation includes the following
modalities: rates for public services or taxes, rates
for administrative services or rights, fee for the license

32
 establishment opening fee, parking fee of
vehicle, public transport rate, special rates for
municipal oversight or control.

d) Taxes that constitute other revenues of governments

national and local

These are the social security contributions that

they finance the health system managed by ESSALUD and the
public pension system managed by the Office of
Pension Normalization - ONP. Contribution to the service
National Industrial Technical Training - SENATI and the
contribution to the national training service for the industry of
the construction - SENCICO. The standard also refers to the
contribution to the national housing fund - FONAVI, but it is about
from a tribute already repealed by Law No. 26969 as of
September 1998. In replacement of the contribution to FONAVI the
the cited Law No. 26969 established the Extraordinary Tax of
Solidarity - IES the same that - broadly speaking - influences the
independent workers and employers (of workers
dependents). The IES has been nullified as of December.
from 2004 by virtue of Law No. 28378 of 11-10-04.

3.6.2. THE NATIONAL SUPERINTENDENCE OF ADMINISTRATION

TAX - SUNAT

The National Superintendency of Tax Administration

SUNAT is a decentralized public institution of the Sector
Economics and Finance, endowed with legal personality of Law
Public, own heritage and economic, administrative autonomy,
functional, technical and financial. It has absorbed the Superintendency
National Customs, assuming the functions, powers and
attributions that by law corresponded to this entity.

33
 3.6.2.1. PURPOSES OF SUNAT

The National Superintendency of Administration

The tax authority seeks to fulfill the following purposes:

a) To administer, supervise, and collect internal taxes, with

exception of the municipal ones, and develop the same
functions regarding contributions to Social Security of
Health (ESSALUD) and the Standardization Office
Provisional (ONP).

b) Manage and control international traffic of

goods within the customs territory and collect the
applicable taxes according to law.

c) Facilitate foreign trade economic activities,

as well as inspecting the international traffic of people and
means of transportation and develop the necessary actions
to prevent and suppress the commission of customs crimes.

d) Propose the regulation of tax regulations and

customs and participate in their preparation.

e) Provide services to taxpayers and responsible parties, to

in order to promote and facilitate compliance with its
tax obligations.

34