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Tax credit will be granted to main inputs of products exempt from IGV

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Waiting for the official promulgation of the autograph of the law that exonerates General Sales Tax (IGV) to chicken, eggs, sugar, bread and noodles, which will be in force from May to July of this year, various unions spoke out and pointed out that said measure would not have the expected impact on the prices of said foods.

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Pio Pantojapresident of the Peruvian Association of Bakery and Pastry Entrepreneurs (ASPAN), criticized the Executive and the Legislative for not having consulted them about the approved measure, since it even generates an impact on them.

“I buy the flour, the butter, the oil, the electricity, the machines with IGV, and obviously by charging the consumer a discount for that tax with a tax credit. But if now I am not going to collect said tax, how do I recover that IGV? [de los insumos]”, expressed the businessman in dialogue with La República.

In this sense, Pantoja does not guarantee that the price of bread will fall, since for two years the bakeries have been subsidizing the product so that its cost to the public is not high.

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For its part, the Peruvian Poultry Association (APA) He also stated that, despite the fact that chicken is exempt from VAT, its price will not fall and could even rise.

The poultry union agrees with ASPAN and argues that the return of the VAT paid on inputs, raw materials, intermediate goods and services used in its production is not contemplated, so this amount will become a cost and affect the final price of these foods, causing the opposite effect to the one sought.

FEM clarifies

Faced with the pronouncements of the unions, the Ministry of Economy and Finance (MEF) clarified that the list of the main inputs that can use the tax credit in each good exempt from VAT will be published.

Thus, a tax credit will be granted to the main inputs required in the production process of the goods that will be temporarily exempt from VAT, so that the final cost of the good is not increased.

impact not guaranteed

Although the IGV exemption is for the entire production chain of chicken, eggs, sugar, noodles and bread, the refund of the IGV that is paid for the inputs in its preparation would not be considered, warns the tax attorney David Zamora, which would affect small businesses.

“The problem is not so much the product, but the other services or goods that are needed to be able to sell that are taxed with the IGV”, the expert mentions.

Zamora also adds that, although the idea of ​​the Executive with this measure it was that the prices go down, this objective is not so easy to fulfill, since the value of a product is given based on supply and demand.

They propose “bread bonus” for the most vulnerable families

An alternative proposed by the baker’s union is the “bread bonus” for the most vulnerable families who have been affected by rising prices.

According to Pantoja, the proposal is similar to the Gas Bonusbut focused on the purchase of bread, where foods such as milk, sugar or other basic necessities could also be included, in alliance with the bakeries through a card.

“The ‘bread bonus’ would be selective, exclusively for those who need it most. In addition, this bread must be made with a Peruvian product such as quinoa and kiwicha, in such a way that the Peruvian farmer also benefits,” said the businessman.


Pio Pantoja, president of ASPAN

“We do not guarantee if it will go down or up, because we are subsidizing the price of bread. We do not assure that it will go down because we are already selling it cheaper. You can lower the weight, but not the price.”

David Zamora, tax attorney

“Everyone who sells these goods does not pay VAT, but the problem is not so much the product, but the other services or goods that you need to be able to sell that are taxed with VAT.”

Source: Larepublica

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