The Council of Ministers approved this Wednesday, April 12, the legal provision that authorizes the refund of the General Sales Tax (IGV) to foreign tourists, also known as Tax Free, informed the head of the Ministry of Foreign Trade and Tourism (Mincetur), Luis Fernando Helguero.
“I want to inform you that today we have approved the supreme decree, which will be published tomorrow, known as Tax Free, which is the refund of the general sales tax to foreign tourists. This is important because reducing this 18% expense will allow those tourists with limited budgets to come and we will have a greater flow. And not only that, but those who have greater resources can consider additional routes or visits, or better yet, additional days of stay in Peru in different destinations,” said the official at a press conference.
This measure, which will be published in the next few hours in the Official Gazette El Peruano, will allow establishments to sell their goods to foreign tourists, for which they will receive a refund of 18% of the IGV paid. According to the head of Mincetur, this regulation will help to increase the country’s tourism potential.
Tourism during Easter Week
Minister Helguero also highlighted that the Easter Week holiday exceeded expectations and mobilized 1.2 million visitors nationwide, achieving an economic impact of US$167 million, which also boosted regional and local economies in Peru.
“The main cities that grew the most were Tacna and Ayacucho by 90%. The latter registered 100% occupancy in hotels of three stars or less; other destinations that also stand out are Tingo Maria and Tarma, (where) establishments were sold out. In some cases, the municipality sought alternative lodging and in other cases a school was set up so that they could camp and use the restrooms.
Other destinations that also grew were Trujillo (by 60%), Madre Dios (by 60%) and Cusco (by 60%); in the latter, Machu Picchu Pueblo had an occupancy rate of 80% and ticket sales to the llaqta were sold out”, said the official.
In contrast, one of the tourist regions that was affected by the heavy rains was Chiclayo, with an occupancy rate of only 22%. Meanwhile, beach tourism in Piura only occupied half of the lodgings.
This great news come with more benefits that you might think
Benefits for the tourism industry
The Tax Free policy is expected to have several benefits for the tourism industry in Peru. Firstly, it will help to attract more foreign tourists, particularly those with limited budgets, by reducing the cost of their purchases.
This is expected to increase the competitiveness of the Peruvian tourism industry and create more jobs. Secondly, by encouraging foreign tourists to spend more money in Peru, this policy is expected to contribute to the overall growth of the economy.
International best practices: Many other countries have already implemented similar Tax Free policies, such as Spain, Italy, and France.
These policies have been successful in boosting tourism and creating economic benefits. By implementing this policy, Peru is following international best practices in the tourism industry.
Requirements for tourists: To be eligible for the Tax Free refund, foreign tourists must meet certain conditions. Firstly, they must not be residents of Peru.
Secondly, they must make a minimum purchase of $30 USD in a single establishment. Thirdly, they must request a Tax Free voucher and present it at the airport when leaving the country. These requirements are in place to ensure that only genuine tourists are eligible for the refund.
To be eligible for the Tax Free refund, foreign tourists must meet the following conditions:
Tourists must not be residents of Peru. This means that they must have a permanent residence in another country and be visiting Peru for a temporary period of time.
Tourists must make a minimum purchase of $30 USD (or its equivalent in Peruvian currency) in a single establishment. This means that if a tourist makes multiple purchases in different establishments, they must add up to at least $30 USD to be eligible for the refund.
Request a Tax Free voucher
Tourists must request a Tax Free voucher from the establishment where they make their purchase. This voucher will include the tourist’s name and passport number, the date and amount of the purchase, and the amount of the tax that was paid.
Present voucher at airport
Tourists must present the Tax Free voucher and their passport at the airport when leaving the country. They will need to go to a special Tax Free refund counter to get their refund. It’s important to note that tourists must request their refund within 30 days of the date of purchase.
The Tax Free refund only applies to the General Sales Tax (IGV), which is currently set at 18%. It does not apply to other taxes, such as the Municipal Promotion Tax (TMP) or the Airport Tax (TUUA). Additionally, the refund only applies to goods that are intended for personal use and not for resale.
Overall, these requirements are in place to ensure that only genuine tourists are eligible for the Tax Free refund and that the process is fair and transparent. By following these requirements, tourists can enjoy the benefits of the Tax Free policy and help to boost the Peruvian tourism industry.
Collaboration between the public and private sectors
The implementation of the Tax Free policy is the result of collaboration between the Ministry of Foreign Trade and Tourism and the private sector. The private sector has played a key role in advocating for this policy and ensuring its successful implementation.
This collaboration is important because it helps to ensure that the policy meets the needs of both the government and the private sector.
The Ministry of Foreign Trade and Tourism has plans to expand the Tax Free policy to other sectors such as restaurants, hotels, and transportation. This is expected to further enhance the competitiveness of the Peruvian tourism industry and attract more foreign investment. By expanding the policy to other sectors, the government hopes to encourage foreign tourists to spend more money in Peru, thereby creating more economic benefits.
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