According to the official proposal reviewed by the Consejo de Ministros on Wednesday, July 29, the Executive branch led by President Keiko Fujimori will ask Congress for legislative powers to enact economic reforms through legislative decrees. The Cabinet led by Luis Galarreta aims to target tax restructuring, bureaucratic red tape, and formalization for micro and small enterprises.
Legislative Powers Sought for Tax and Economic Reforms
The executive branch’s requested legislative delegation covers multiple fronts, including tax, trade facilitation rules. According to the Cabinet’s review, these powers allow the administration to bypass standard lengthy legislative debates to issue norms with the force of law. President Fujimori announced these core pillars during her inaugural Mensaje a la Nación, prioritizing private investment recovery and market competitiveness.
The proposed decrees target structural reforms and state modernization to accelerate public and private project execution. Furthermore, the agenda incorporates measures for citizen security and the fight against criminality. The draft will receive formal approval during the next ministerial session before heading to the Congreso de la República.
Reducing Bureaucracy and Overhauling Tax Regulations
According to government documents, streamlining administrative processes and eliminating bureaucratic barriers form a cornerstone of the executive strategy. President Fujimori stated an intent to launch a deep deregulation process to lift administrative burdens off citizens and investors. Concurrently, the tax and labor policy proposals aim to significantly lower labor informality rates without stripping workers of established legal rights.
Support for Mypes and Labor Formalization
Micro and small enterprises, known locally as mypes, face new protections and formalization incentives under the draft bill. Over 70% of the national workforce operates within the informal sector, a metric the administration aims to shrink. To offset cost pressures from a planned minimum wage increase from S/ 1,130 to S/ 1,300, the package includes a temporary subsidy designed to protect smaller businesses.
Did you know? Over 70% of Peru’s active workforce operates in the informal economy, making formalization and mype support central pillars of the current administration’s legislative agenda.
State Modernization and Institutional Overhaul
Administrative restructuring extends to state agencies to cut down approval times for infrastructure and business projects. As part of this broader state modernization, the Cabinet reviewed reorganization reports concerning the Autoridad Nacional del Agua (ANA) and the Ministerio de Desarrollo Agrario y Riego (Midagri). Major business associations have identified these structural bottlenecks as primary targets for unlocking national productivity.
Frequently Asked Questions
What does the executive branch’s request for legislative powers entail?
According to the Consejo de Ministros, the request asks Congress to delegate authority so the Executive can issue legislative decrees on taxation, red tape reduction, mype support, and citizen security.
Why is the government targeting the informal sector?
With more than 70% of the workforce operating informally, the administration aims to expand the formal business base, boost productivity, and improve social protection.
How will smaller businesses handle the proposed minimum wage hike?
The administration plans to issue a temporary bonus alongside the wage increase from S/ 1,130 to S/ 1,300 to help mypes absorb the higher labor costs.
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