Identifier
Created
Classification
Origin
05LIMA4370
2005-10-11 18:01:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Lima
Cable title:  

CONGRESS PASSES EXXON-MOBIL TAX AMENDMENT

Tags:  EINV EFIN ECON EPET KIDE PE 
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UNCLAS LIMA 004370 

SIPDIS

SENSITIVE

DEPT FOR WHA/AND, WHA/EPSC, EB/IFD/OFD, EB/CBA, EB/IFD/OIA
TREASURY FOR OASIA/INL, DO/GCHRISTOPOLUS
COMMERCE FOR 4331/MAC/WH/MCAMERON
USTR FOR BHARMAN/DWEINER

E.O. 12958: N/A
TAGS: EINV EFIN ECON EPET KIDE PE
SUBJECT: CONGRESS PASSES EXXON-MOBIL TAX AMENDMENT

REF: A) Lima 3187 B) Lima 1660

UNCLAS LIMA 004370

SIPDIS

SENSITIVE

DEPT FOR WHA/AND, WHA/EPSC, EB/IFD/OFD, EB/CBA, EB/IFD/OIA
TREASURY FOR OASIA/INL, DO/GCHRISTOPOLUS
COMMERCE FOR 4331/MAC/WH/MCAMERON
USTR FOR BHARMAN/DWEINER

E.O. 12958: N/A
TAGS: EINV EFIN ECON EPET KIDE PE
SUBJECT: CONGRESS PASSES EXXON-MOBIL TAX AMENDMENT

REF: A) Lima 3187 B) Lima 1660


1. (SBU) Summary. After almost a year of anticipation, the
Congressional Plenary voted on October 6 in favor of the
Ministry of Finance (MEF) amendment to the tax law, thereby
granting Exxon-Mobil a $15 million credit over the next
three years. Under Peruvian law, President Toledo must
approve the bill before it becomes law. According to Exxon-
Mobil and our Congressional contacts, President Toledo is
expected to sign the bill into law next week. End Summary.

Amendment to Tax Law Passed
--------------


2. (SBU) After almost a year of anticipation and continuous
advocacy by Post, the Peruvian Congress voted in favor of a
Ministry of Finance amendment to the tax law, which would
grant Exxon-Mobil a $15 million tax credit over the next
three years for VAT paid on interntational fuel sales. The
Congressional vote was 67-10 in favor of the bill. Exxon-
Mobil representatives, who worked closely with the Peruvian
Mining and Energy Society (SNMPE) to lobby key Congressmen,
informed us that they are pleased with Congress' decision to
support the bill.


3. (U) According to Peruvian law, the bill must be sent to
President Toledo for his approval before becoming law.
Because October 7 is a Peruvian holiday, the President of
Congress will send the bill to the Executive for approval
early next week.

Comment
--------------


4. (SBU) President Toledo understands the urgency of the
MEF tax amendment. Not only will the new law help Exxon-
Mobil, but it will also enable other companies that sell
fuel for export to recoup VAT. The law will also improve
Peru's investment climate by indicating that the GOP is
willing to correct laws that deter investment. We expect
President Toledo to sign the bill immediately.

STRUBLE