Tax compliance cost survey - Peru

Oscar Calvo-Gonzalez

LAC PREM

ocalvogonzalez@worldbank.org

February 1, 2012

Key result #1: Compliance costs, percent of sales Taxpayers with 3rd category income, general regime

EU-15 (2004)

<250 trab. >250 trab.

1.3 % 0.01 %

South Africa

Key result #2: collection vs. compliance costs

0

1000

2000

3000

4000

5000

6000

7000

Collection per taxpayer (3rd category income in general

regime)

Median compliance cost per taxpayer (3rd category

income, general regime)

Nuevos soles

Agenda

• Approach followed

• Selected survey results

• Reflections on issues for Bank engagement

5

Approach

• Input from tax authority (SUNAT) and Ministry of Finance: goal to focus on entire taxpayers’ cycle

• Partnership with Association of CPAs (Colegios de ContadoresPúblicos)

• Based on WBG experience in other countries:

– On line; Focus client; Modular approach

• 2-month pilot, 2-month field

Sample

NumberPercent

(of total)

CPAs reached (by email) 23,990 -

CPAs that click on link to survey 3,488 15

CPAs with at least one client with 3rd

category income2,547 11

CPAs that answer all survey questions 2,075 9

Time responding questionnaire55 min (mean)

31 min (median)

7

Móduloinicial:

Perfil del contador

Clientela

ClienteTIPO

RUC

RUSRentaPlanilla

Móduloapreciaciónservicios de la SUNAT:

Estar al tanto de cambios

Percepciónsobre la calidad de servicios de atención al cliente

RERLibrosRentaIGVMecanismos de retenciónPlanilla

RGLibrosRenta (incl. cecl. anual)IGVMecanismos de retenciónPlanillaITANDAOTPDTs

Solicitudes de devolución

Auditorías o inspecciones

Aplazamientos

Fraccionamiento

Sanciones

Reclamos

Agenda

• Approach followed

• Selected survey results

• Reflections on issues for Bank engagement

n=3261 n=2509

I work for

an

accounting

business

7%

I do not do

tax work

for

anybody.

2%

I have my

own tax

accounting

practice

serving

clients

34%

I have an

employer

and also I

do some

accounting

work

outside

47%

I have an

employer

and I do

not do any

accounting

work

outside

10%

Tax services to business taxpayers, i.e.,

taxpayers with third-category incomes?

No ,

714

Yes ,

2547

Years of professional experience in tax matters

Less than

2 years

3%

11 - 20

years

37%

6 - 10

years

27%

2 - 5 years

19%

More than

20 years

14%

n=2050

Number of clients (with 3rd category incomes) by CPA

n=2050

Percent of clients in sample by tax regime

n=2048

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

RUS (n=164)

RER (n=364)

RG (n=1235)

Total (n=1763)Fixed monthly payment Pay per service

The majority of clients pay a fixed monthly fee

• 180 CPAs reported the exact amount; 895 reported a range

RG: Time it takes monthly to prepare and fill in necessary

information to complete tax returns for monthly fee clients

Withholding mechanisms are particularly costly

Hours per month,

service-based fee clients

Special

regime (RER)

General

regime

Bookkeeping 3.4 8.8

Monthly return 1.4 5.1

Withholding mechanisms

(detracciones, percepciones, retenciones)1.7 7.0

Annual tax return (hours per year) n.a. 34.2

Time and money spent by respondents per year to stay abreast

of changes in laws and regulations (time spent attending tax

seminars, money paid as entry fees to such events)

Time Moneyn=2292 n=2260

Usefulness of sources of information regarding tax laws and

regulations (% of respondents stated that a source is most useful)

n= 2349

PDT (Programas de Declaración Telemática – online filing

programs) – percentage of respondent who said that they

have problems with various aspects of the PDT

n= from 1739 to 1910

Perception of changes in tax laws (% of respondents reporting)

n=2121 to 2159

Agenda

• Approach followed

• Selected survey results

• Reflections on issues for Bank engagement

22

Reflections on Bank engagement

• “Natural” role for the Bank (tax authority may not have the trust of CPAs to undertake the survey)

• Cost-effective, though requires great attention to follow up;do not underestimate the demand that it may elicit!

– In Peru, authorities want overall estimate of compliance costs to monitor

• Resist the temptation by authorities to do a very long survey

• “Raw-ish” data left with authorities? Analysis?

– Bank is not the natural candidate to exploit all the wealth of information

– Need to consider the governance of repeating it…

“¿Would you be interested in being part of a group of experts who would respond a similar survey once a year?”

Great opportunity to engage

CPAs on an ongoing basis?

Thank you

2. Registration for

RUC number

1. Taxpayer gathers

information

3. Authorizing

receipts book

(comprobantes de

pago, either

factura or boleta)

4. Authorizing

accounting books

5. Filing and payment

6. Auditing and control

• Audit

• Control in roads (control movil)

• Inspectors visits to check use of

receipts (fedatarios)

7. Collection (cobranza coactiva)

• Payment order (ordenes de pago)

• Resoluciones de determinaciones

• Fines (resolucion de multa)

8. Complaints

• Before SUNAT (reclamos)

• Before court (apelaciones)

9. Refunds

POST-FILING PRE-FILING

FILING

What percentage of communications with SUNAT were answered

successfully (% of respondents answered the question)?

Principal reasons to advise a RG client not to file under the RER

and to file under RG? (%, multiple selection was allowed)

Not to file under RER File under RGN=1302 n=1289

28

331TOTAL

13Queries about the outcome of the raffle12

14Outright denunciations of the survey as a scam11

14Complaints about the design of the survey instrument (including complaints

about the raffle)

10

27Asking whether we received their completed questionnaires9

39Complaints about the timing of survey (busiest time for accountants)8

412Communicating that they completed the survey under a different email address7

620Reporting technical difficulties logging in6

929Asking to be deleted from distribution list or communicating their decision not to

answer the survey for whatever reason

5

1033Requests to verify authenticity of the survey4

1034Responses unrelated to the survey (queries about job opportunities, invitations

to join facebook, etc)

3

1858Requests for more information about the survey (how to answer, deadline, etc)2

36118Accepting invitation to participate in the survey or communicating that they

already completed it

1

Percent of totalNo. of respondentsEmails received in encuestatributos@worldbank.org by topic

Peru - Tax Compliance Cost Survey

2. Registration for

RUC number

1. Taxpayer gathers

information

3. Authorizing

receipts book

(comprobantes de

pago, either

factura or boleta)

Free of charge (1.9

million telephone

calls + 2.5 m on-site)

Process Coments

Simple: 10 min

wait time + 7 min

processing; free

Through

licensed

printshops,

by end-2008

online; free

4. Authorizing

accounting books

Delegated to

notary publics

5. Filing and payment

Form Payment

Electronic (PDT)

Paper At bank

Online

6. Auditing and control

• Audit

• Control in roads (control movil)

• Inspectors visits to check use of

receipts (fedatarios)

Time consumed in audits an issue

(focus groups)

Businesses need to keep receipts 4 yrs

SUNAT has

judge-like

powers;

actions do

not match

the debt

7. Collection (cobranza coactiva)

• Payment order (ordenes de pago)

• Resoluciones de determinaciones

• Fines (resolucion de multa)

8. Complaints

• Before SUNAT (reclamos)

• Before court (apelaciones)

Even reclamos

need to be signed

by lawyer

9. Refunds

Taxpayers’ cycle in Peru

Profile Respondant

Client Information

Turnover

Legal entity

Activity

Tax regime

TAX REGIME: RUS TAX REGIME RER

Registration Registration

Unique Monthly

RUS payment Payroll Taxes Accounting books

Keeping abreast of tax

changes Income Tax VAT Payroll Taxes Income Tax VAT Payroll Taxes

Refunds

Withholding

Mechanisms: Large

buyers in transactions

of different products

Payment on

account of

the Income

Tax

Monthly Value

Added Tax

Audits/Inspections by

SUNAT Annual

income tax

declaration

Withholding

Mechanisms: Large

buyers in

transactions of

different products

Keeping abreast of tax

changes

Objection and appeals

Temporary

Tax on Net

Refunds

Postponement and / or

Installment payment of

the Tax debt

Audits/Inspections

by SUNAT

Keeping abreast

of tax changes

Objection and

appeals Refunds

Postponement and / or

Installment payment of

the Tax debt

Audits/Inspections

by SUNAT

Objection and

appeals

Postponement and /

or Installment

payment of the Tax

debt

Perceptions of

SUNAT

Other information

Overall comments

GENERAL REGIME

Registration

Accounting books

SURVEY OF TAX COMPLIANCE FLOW CHART

C uadro N ° 46

C ON T R IB UYEN T ES IN SC R IT OS SEGÚN R ÉGIM EN T R IB UT A R IO Y C A N T ID A D D E A F ILIA D OS A ESSA LUD , 1997-2009 (M iles de co ntribuyentes)

R EGIST ER ED T A XP A YER S, A C C OR D IN G T O T A X R EGIM E A N D N UM B ER OF P EOP LE M EM B ER OF ESSA LUD , 1997-2009 (T ho usands o f taxpayers)

2008

C o ncepto D ic.

I. C o ntribuyentes co n R UC 1/ 4,309.1 R egistered T axpayers acco rding to

T ax R egime 1/

P rincipales C o ntribuyentes 2/ 14.7 Large T axpayers 2/

M ediano s y P equeño s C o ntribuyentes 3/ 4,294.4 M edium and Small taxpayers 3/

Régimen General 4/ 495.8 General Regime 4/

Tercera Categoría 487.6 Third Category

Otras rentas de Tercera Categoría 5/ 8.2 Others 5/

Régimen Especial de Renta 140.8 Special Income Tax

Régimen Único Simplificado 513.2 Single Simplified Regime

Trabajadores Independientes 3,237.9 Independent Workers

II. C ant idad de af iliado s a Essalud 3,484.4 N o n R egistered T axpayers

Afiliados Regulares 6/ 2,661.8 Regular M embers 6/

Pensionistas o Cesantes 7/ 822.7 Pensioners 7/

1/ Sólo considera contribuyentes act ivos.

2/ La totalidad de los Principales Contribuyentes pertenecen al Régimen General.

3/ El total de M edianos y Pequeños Contribuyentes no coincide con la suma de las partes, pues un contribuyente puede estar afecto a más de un tributo.

4/ Se considera en el Régimen General a los contribuyentes afectos al Impuesto a la Renta de Tercera Categoría, excluido el Régimen Especial de Renta.

5/ Incluye a los contribuyentes comprendidos en regímenes especiales de Tercera Categoría, como los de Amazonía, Productores Agrarios y Frontera.

6/ Trabajadores declarados por los empleadores bajo el código de tributo de Essalud 5210 (Seguro Regular de Essalud).

7/ Pensionistas o cesantes declarados por los empleadores bajo el código de tributo de Essalud 5242 (Seguro Regular - Pensionistas).

Fuente: Superintendencia Nacional de Administración Tributaria (SUNAT).

Elaboración: SUNAT - Intendencia Nacional de Estudios Tributarios y Planeamiento.

C uadro N ° 27

IM P UEST O A LA R EN T A D E T ER C ER A C A T EGOR Í A - SEGÚN T A M A ÑO D E C ON T R IB UYEN T E, 2000-2009 (M illo nes de nuevo s so les)

IN C OM E T A X - T H IR D C A T EGOR Y, A C C OR D IN G T O T H E SIZ E OF T A XP A YER S, 2000-2009 (M illio ns o f nuevo s so les)

2008

C o ncepto T o tal

Total 14,920.7

Principales Contribuyentes

del ámbito nacional 13,302.1

Megas 1/ 3,916.4

Top 2/ 2,587.8

Resto de Principales Contribuyentes 3/ 6,797.9

Medianos y Pequeños Contribuyentes 4/ 1,618.6

Nota:

Corresponde a los pagos en efect ivo, cheque y/o documentos valorados. No considera otras formas de pago de ext inción de la obligación tributaria como compensación de saldos a favor y otros.

Considera los pagos a cuenta del Impuesto a la Renta de Tercera Categoría. A part ir de mayo del 2003 hasta diciembre del 2004, incluye lo recaudado por Anticipo Adicional del Impuesto a la Renta.

1/ Considera 54 principales contribuyentes hasta enero del 2004, seleccionados por sus niveles de recaudación, ventas, compras y act ivos. A part ir de febrero del 2004 considera 41 principales contribuyentes.

2/ Hasta enero del 2004 considera 200 principales contribuyentes, seleccionados por sus niveles de recaudación, ventas, compras y act ivos, diferentes a los contribuyentes M egas. A part ir de febrero del 2004 considera 208 principales contribuyentes.

3/ Corresponde a lo recaudado por la Intendencia Nacional de Principales Contribuyentes y los Principales Contribuyentes de la Intendencia Regional Lima, sin considerar a los contribuyentes M egas ni Top.

Adicionalmente, considera lo recaudado por los restantes Principales Contribuyentes en el ámbito nacional.

4/ A part ir del mes de noviembre 2002, 200 contribuyentes medianos y pequeños pasaron al directorio de la Intendencia Nacional de Principales Contribuyentes.

Fuente: Superintendencia Nacional de Administración Tributaria (SUNAT).

Elaboración: SUNAT - Intendencia Nacional de Estudios Tributarios y Planeamiento.

Chart: Number of clients per accountant

Number of clients for which each accountant helps to file the annual income tax return (under the general income tax regime)

Source: SUNAT.

Notes: Based on 240,000 annual tax returns in 2006 under the general income tax regime which report the RUC number of the accountant (the

RUC number is used as the basis for identifying all the clients of a given accountant). Excludes 60,000 annual tax returns which report the

accountant's name but do not report the RUC number of the accountant.

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Nu

mb

er o

f a

cco

un

tan

ts

Number of clients per accountant

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

1-10 11-20 21-30 31-40 41-50 51-338

Nu

mb

er o

f a

cco

un

tan

ts

Number of clients per accountant

Of the total 23,907 accountants

identified, 20,798 accountants

have up to 20 different clients

for which they file the annual

income tax return under the

general income tax regime

The 20,798 accountants with

up to 20 different clients

account for 102,909 tax

filings (out of approx.

240,000 tax filings which

report the RUC number of the