In the statement of reasons, the government indicated “the world was already experiencing a situation of high inflation due to the recovery of the international economy in a context of low interest rates. In this way, the prices of raw materials were rising significantly. This situation was exacerbated as of February 24 Of current year when the war between Russia and Ukraine breaks out. In particular, the prices of products such as wheat showed a very significant rise, since both States are important suppliers of said good, representing 30% (thirty percent) of world production.”
“It is a fact that the evolution of the prices of certain commodities, such as oil and grains, impacts the price of a wide variety of products, generating greater inflationary pressure,” warns the Executive.
In this context, the government’s project provides for the exemption, for a period of 30 (days), from the VAT applicable to retail sales of common white bread, campaign cookies, pasta and noodles that are currently taxed at the rate minimum of 10%.
In addition, a VAT refund regime is granted, included in local purchases and imports of goods and services intended to directly and indirectly integrate the cost of the goods included in the referred disposals. Finally, the Executive Power is empowered to extend the term of said exoneration, for the only time.
The Supermarket Association assured that this tax measure will be reflected in a reduction in the price paid by consumers. “At a minimum, (prices) should not increase and, in some cases, we will be able to see a reduction in specific costs,” said Livestock Minister Fernando Mattos in interview with Telemundo.
