After the start of the implementation of the brand new tax reform with the New Year, a wave of price rises welcomed the New Year. Two of the government’s top money men, Miguel Cocco, the head of the Customs office and Juan Hernandez, the head of the Tax Department attributed the price increases primarily to speculation and said the government would act energetically against it. At the same time, the two men announced that they would be sending lists to merchants, detailing just what merchandise and foodstuffs were to be included in the new tax schemes. The two offices will produce two lists: one that will have the taxable products and their prices, and another with a list of those products that are still exempt from the VAT taxes.
Hernandez told reporters that there were people that were trying to “fish in muddy waters”, in other words trying to take advantage of a confusing situation. Both men accused merchants of trying to impose price hikes and blame the increases on the new tax reform.
To their way of thinking, only nine products that were previously exempt form the VAT are now taxable, and he mentioned salt, soap, toothpaste, matches, vinegar, soup mixes, and salted codfish. And, he added that all of the articles previously paid a 13% exchange commission tax on the dollars used to import these products, and this tax has been eliminated.
In his comments to El Caribe, Hernandez revealed that a “mistake” had been made when pastas were included in the new tax set-up. He said that these products are exempt from the Vat and that the authorities have promised the Association of Pasta Producers that they will not apply the tax. Of the 159 new products that were included in the tax reform program, 134 are raw materials and only 34 are foods or soaps.