Paraguay: VAT for fruit and veg products to increase

The fruit and vegetable products currently have a 0% VAT, a decision taken by the Executive for 2014 with the intention of avoiding impacting the economy and giving producers more time to adapt to the new rules of Law No. 5061/13 (which establishes the Iragro and extends the VAT to the agricultural sector).

The Ministry of Finance confirmed yesterday that it wouldn't change its timetable for implementing the agricultural tax and that, starting next month, the rate would increase to 5% for these products, as initially established.

According to experts, the decision will be the first blow of 2015 on the consumers' pockets, especially for the least favoured sectors, as it will increase the price of very sensitive products of the daily basket.
The horticultural products that will have a tax increase are: tomato, onion, lettuce, cassava, sweet potato, potato, carrot, locote, parsley, beets, cabbage, artichokes, peppers, garlic, basil, chard, celery, eggplant, watercress, broccoli, squash, zucchini, thistle, cilantro, cauliflower, spinach, asparagus, fennel, ginger, radish, cucumber, leek, radish, and the so called medicinal plants, such as the tereté weeds and others.

In addition, the tax increase will also affect fruit products, such as orange, avocado, banana, apple, pear, pineapple, peach, strawberry, guava, lime, lemon, tangerine, grapefruit, papaya, melon, watermelon, grape, mango, passion fruit, blueberry, custard apple, plum, coconut, strawberries, pomegranate, kiwi, quince and blackberry.

The Deputy Minister of Taxation, Marta González Ayala, said yesterday that the tax for these products would come into effect as of January and declined to give figures for a likely increase in revenue.

Source: ABC

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