The president of Lima’s stock exchange said if a law standardizing capital gains taxes in Peru is not passed by Dec. 31, the Lima exchange won’t merge with the Chilean and Colombian markets until 2012.
On Monday the Lima exchange suspended its participation in the planned integration of the Peruvian, Chilean and Colombian exchanges, also known as the Integrated Latin American Market or MILA.
Tests on integrating the three systems began in November and direct trading between all three markets was due to start at the end of January.
Officials from Chile and Colombia have said their integration plans will continue despite Lima’s move.
In Tuesday’s edition of newspaper La Republica, the president of Lima’s Stock Exchange Roberto Hoyle said if the law standardizing capital gains taxes at 5% from a current range of 5% to 30%, isn’t passed by the end of December, then the Lima exchange would delay its integration until 2012. Hoyle’s quotes were confirmed by a spokeswoman for the Lima Stock Exchange.
Many analysts believe the Lima exchange’s move to suspend its integration is a ploy to pressure Congress into rapidly passing the new capital gains tax standardization law, which has been ready for debate since July this year.
Although full sessions of Congress won’t resume until March, the tax measure could be debated and passed before Dec. 31 by a Permanent Congressional Commission. A spokesman for the Permanent Commission said Tuesday no commission meetings are planned for this week but, given 48 hours notice, it could meet by Friday. If not, it will have five days next week to meet.
Earlier this month, Peru Finance Minister Ismael Benavides said he was working to have the capital-gains tax standardized at 5%. No further comment from the Finance Ministry was immediately available Tuesday.
If it goes ahead MILA would have 563 listed companies, a market capitalization of some $614 billion — compared to Brazil’s $1.5 trillion — and an estimated initial daily trading volume of about $300 million. (Sophie Kevany / Dow Jones Newswires)
