In Peru, informality is one of the main challenges of the economic and tax system. A large share of workers and businesses operates outside the formal registration system or only partially complies with tax obligations. This means that much of the income is not declared and therefore does not generate taxes. The result is a smaller tax base, greater pressure on formal taxpayers, and a strong reliance on indirect taxes such as the VAT (IGV).

Estimates of Taxpayers Who Do Not Fully Comply

There is no single exact figure, but combining data on labor and business informality allows for reasonable estimates.

In the case of small businesses, a large majority operates informally or semi-formally, meaning they do not pay taxes regularly or fully.

In the case of individuals, a significant share of self-employed and independent workers does not consistently declare income.

Large companies in Peru, by contrast, are mostly formal and do pay taxes, although cases of tax optimization or disputes may exist.

Tax Structure: Indirect Taxes and Overall Burden

In Peru and much of Latin America, indirect taxes (such as VAT/IGV) account for a relatively large share of total tax revenue due to the limited base of income taxation. In contrast, in economies such as the United States, Japan or Europe, tax revenue relies more heavily on direct taxes on income and social contributions.

International Comparison

Peru and Latin America

• High labor and business informality across the region
• Peru is in a mid-to-high informality range, alongside Mexico and Colombia
• Chile and Uruguay show higher formality and stronger tax collection
• High reliance on indirect taxes (VAT/IGV)
• Moderate total tax revenue: ~15–22% of GDP (Peru: ~15–17% of GDP)

United States

• Total tax revenue: ~25–27% of GDP
• High formality and strong enforcement
• Greater reliance on income taxes

Japan

• High tax compliance and low informality
• Balanced system between consumption, income, and social contributions
• Total tax revenue: ~33–36% of GDP

Europe (Germany and France)

• Very high total tax revenue: ~40–48% of GDP
• High labor formality and low informality
• Strong reliance on income taxes and social contributions
• Large and well-established welfare states