Peru waives taxes on essential food items to combat inflation

div classBodysc17zpet90 cdBBJodivpLIMA Reuters – Perus congress approved legislation on Tuesday that waives taxes for what it deems as essential foods, aiming to fight surging prices that have hit consumers hard in recent months.p

pThe measure, backed by the government of President Pedro Castillo, is estimated to cost some 3.8 billion soles 1 billion in lost revenue.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pThe tax exemption will last eight months, applied to bread, chicken, sugar and pasta, according to the text of the law.p

pThe final list of items was significantly scaled back following objections from the government that the congress was trying to exempt items, such as beef, that were not truly essential.p

pConsumer prices leapt 1.48 in March, reaching a level 6.82 higher than a year earlier. The monthly rise was the fastest since 1996.p

pThe central bank does not expect annual inflation to return to its target range of 1 to 3 until early 2023.p

pPeru has this month seen road blockades as anger has flared over price rises, which have worsened since Russia invaded Ukraine.p

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pp Reporting by Marcelo Rochabrun and Valentine Hilaire Editing by David Alire Garcia and Bradley Perrettp

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