Peru's Congress approves Kuczynski's economic reform package

LIMA (Reuters) - Peru’s Congress voted overwhelmingly to give centrist President Pedro Pablo Kuczynski 90 days to legislate his initial batch of economic reforms, clearing the way for higher corporate taxes and a lower value-added tax rate.

The green light marked an initial victory for Kuczynski in a Congress controlled by the right-wing Popular Force party, which summoned his ministers to defend his proposed policies in several special sessions in recent weeks.

Lawmakers in the single-chamber Congress voted 99-17 in favor of Kuczynski’s request for legislative powers to implement his proposed economic policies, and unanimously gave him 90 days to do so.

Kuczynski had initially asked for a 120-day window.

Every president in Peru this century has received special powers from Congress for pushing out initial reforms.

Kuczynski has proposed cutting the value-added tax rate to 17 percent from 18 percent next year to broaden the payer base, while also hiking corporate taxes to help rein in the fiscal deficit.

The 77-year-old former investment banker, who narrowly won June’s presidential election, also plans to overhaul state bidding agency Proinversion to push out more infrastructure projects through private-public partnerships.

The finance ministry has said the reforms will revive investments and allow economic growth to quicken to at least 5 percent per year in coming years, from about 4 percent now.

Congress also granted Kuczynski special powers for legislating reforms aimed at fighting crime and corruption and restructuring state-owned energy company Petroperu.

Lawmakers have until the end of November to vote on Kuczynski’s proposed 2017 budget.

Reporting By Mitra Taj and Teresa Cespedes; Editing by Paul Tait