US embassy cable - 05LIMA4370

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CONGRESS PASSES EXXON-MOBIL TAX AMENDMENT

Identifier: 05LIMA4370
Wikileaks: View 05LIMA4370 at Wikileaks.org
Origin: Embassy Lima
Created: 2005-10-11 18:01:00
Classification: UNCLASSIFIED//FOR OFFICIAL USE ONLY
Tags: EINV EFIN ECON EPET KIDE PE
Redacted: This cable was not redacted by Wikileaks.
This record is a partial extract of the original cable. The full text of the original cable is not available.

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 

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