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LIMA, Jan 7 (Reuters) - The government of Peruvian President Pedro Pablo Kuczynski passed a law on Saturday that will lower the Value Added Tax rate by one point to 17 percent starting July 1, six months later than previously planned.
The reduction can only go into effect if revenues from the tax equal at least 7.2 percent of gross domestic product in the 12 months through May 31, according to the law published on the website of the government gazette El Peruano.
Kuczynski, who took office in late July, had campaigned on a promise to cut the VAT rate to 15 percent from 18 percent to broaden the payer base and stimulate consumption.
But his centrist government has opted to lower the rate gradually as it grapples with slipping tax revenues and tries to rein in a bigger-than-anticipated fiscal deficit left by the previous government.
Reporting By Mitra Taj; editing by Diane Craft