Raul Diez Canseco Terry :: LA VERDAD SOBRE EL D.S. 047-2003-EF

THE TRUTH BEHIND D.S. 047-2003-EF
¿WHAT IS THE TEXT OF SUPREME DECREE 047-2003-EF?
 

From the words in the decree, it can be seen that the first article reads: «Be informed that the Value Added Tax (IGV) does not affect the sale of goods or the food and beverage services rendered to those in the condition of passengers when these take place in the authorized points of sale located in the International Zone of the Airports in the Republic (...)».

Guillermo Grellaud Guzmán, Esq., senior partner of “KPMG Grellaud y Luque Abogados” and  member of the Tax System Committee of the prestigious “Confederación de Instituciones Empresariales Privadas” (Confiep) (Private Entrepreneurial Institutions Confederation), when asked for an opinion on the scope of D.S. 047, stated, among other ideas, that Supreme Decree N°. 047-2003-EF shows no flaws that may render it unconstitutional.

As we all are aware –both in the past and now- no goods or service transaction carried out in the duty free area of any airport in the whole world is affected by the Value Added Tax. In this sense and after careful consideration it is found that D.S. 047 merely specifies once again that the sale of goods or the food and beverage services rendered to passengers in the international zones of our airports are not taxed with IGV.

The promulgation of this decree was based on the repeated changes on the part of SUNAT of the criteria about tax unaffected operations carried out in the International Zone; thus, it was necessary for the MEF (Ministry of Economy and Finance) to intervene (which indeed happened) and to establish, subject to the provisions of the Taxation Code, the corresponding regulations in order to avoid unfounded tax rate calculations.

“It has been said that in Peru it is not possible to exclude from taxation by means of supreme decrees. This statement is not true as to what IGV affects, because by means of a supreme decree it is possible to establish the requirements for service export operations to be excluded from this tax payment”.
 Dr. Javier Silva Ruete, ministry of Economy and Finance by the time D.S. 047 was promulgated. He is alternate executive director of the IMF for the South Cone.

“As we will demonstrate in the following lines, this statement lacks truth because Supreme Decree 047 simply serves to reaffirm a pre-existing exemption and not to establish a new exemption of taxes of any kind because the sale of goods or the food and beverage services rendered to those in the condition of passengers in the authorized points of sale located in the international zones of the airports in the Republic have been considered exports in our country since 1968, and as such they are beyond the scope of the IGV that imposes taxes on transactions within the national territory and that is applied to those  operations carried out within the cycle of production and distribution of goods and services, cycle that does not take place in the transactions carried out in the international zone of the airports referred to herein.
Therefore, DS 047 does not incur in any of the alleged infractions included in the complaint, rendering the complaint groundless, from what has just been said, in all its arguments because they lack a sound basis.”
Position of Dr. Javier Silva Ruete

“I think that it was necessary (to promulgate) DS 047, just as it was necessary (to promulgate) DS 010 (during the Government of Alberto Fujimori), to eradicate the uncertainty generated by Legislative Decree 878”.
Economist Fernando Zavala Lombardi, ministry of Economy and Finance (2005-2006).

“Supreme Decree 047 simply serves to make a precision on a regulation that has been in effect in the country for over 30 years. It has meant no benefit to anyone, at all”.
Eng. Marcial Ayaipoma Alvarado, president of the Republic’s Congress (July 2005-July 2006).

“From my point of view, the provisions of Supreme Decree N° 047-2003-EF coherently respond to the criteria established by the Law of IGV in the sense that this tax does not affect transactions carried in the international zone of the ports and airports of the Republic”.
Guillermo Grellaud Esq., expert in taxation law, senior partner of “KPMG Greallaud y Luque Abogados”.

 “In this case there are three possibilities:

First: there was a wrongful act from an administrative or technical viewpoint. However, the Sub-commission declares there were no wrongful acts, from either the technical or the administrative points of view. Thus, it is not possible to see it as an infringement to the constitution.

Second: ¿did Mr. Diez Canseco Terry get any kind of benefit out of this? No. The Sub-commission itself states: there was no benefit whatsoever.

Third: all we have left is to ask is whether any friend was benefited. Then, if it was, it would be fair to find out whether such an individual was a friend, which by the way has not been proven.

Finally, assuming it was a friend. I ask: ¿did such a friend have any legal need or not? Now then, who has come to the conclusion that this friend had any legal need? Well then, it was the juridical assessors of the Ministry of Foreign Trade and Tourism, the juridical assessors of the Ministry of Economy and Finance, and the Fiscal Tribunal, before and after issuance of Supreme Decree No. 047-2007-EF.”

(…)

“From my standpoint, we must vote against the resolution proposed in favor of the accusation”
Rafael Rey Rey, currently Minister of Production.

“No liability has been found for committing an infringement against the articles 74, 103 and 118 entry 8) of the Constitution on the part of the former ministers of Foreign trade and Tourism and of Economy and Finance Raúl Diez Canseco Terry and Javier Silva Ruete respectively, when participating in the issuance of Supreme Decree No. 047-2003-EF, because this supreme decree did not rule, exempt or disaffect, it only served to clarify or precise that, indeed, the rendering of food services in the international zone of the airports in the Republic was not taxed, and there was already an antecedent as to this precision by means of another supreme decree, as we have pointed out with Supreme Decree No. 010-98-EF and the varied regulations issued by the Fiscal Tribunal in this respect.”
One of the findings of the Constitutional Accusations Sub-Commissions of the Congress of the Republic.

In deed, as to what the abovementioned Sub-Commission states, the Fiscal Tribunal of the Republic, the highest technical entity in taxation matters of our country, in Resolution No. 07101-2-2003 dated December 5, 2003, points out that when interpreting Resolution No. 05825-2-2003 dated October 15, 2003, “did not require Supreme Decrees No. 010-98-EF y 047-2003-EF, because the criteria had already been established by Resolutions No. 520-4-97 y 8353-5-2001, which were issued before supreme decree No. 047-2003-EF”. The underlining and bolding is ours.
Text of the resolution of the Fiscal Tribunal.

Finally, and since it could not have been otherwise as follows from reading the texts abovementioned, after all due investigations and after long sessions held before congress commissions that even called for double voting, no liability was found on the part of Raúl Diez Canseco as to the alleged infractions and, therefore, the case has been closed.

Currently, former Vice-president Constitutional of the Republic Mr. Raúl Diez Canseco has no impending constitutional accusation at all, nor any other accusation of any nature, that may have been originated by his holding a public office. They have all been superseded.