Exemption from VAT on food: rule could make products more expensive, according to the CCL

Exemption from VAT on food: rule could make products more expensive, according to the CCL

The Lima Chamber of Commerce (CCL) points out that the law onFive foods with a high incidence in the family shopping basket show certain distortions that will end up making the sale of goods to the final consumer more expensive.

Among them is that the company may only subtract the VAT paid to the suppliers of those inputs that appear in the next regulation to be published, that is, if some acquisitions of goods and services are outside this benefit (fiscal cost) by not being qualified as main inputs, the IGV paid for such acquisitions (for example, maintenance services, transportation and the margins of wholesale and retail distributors, among others) may not be taken as a tax credit; therefore, that IGV will end up being included as a cost in the final price of the good.

Likewise, this recently published rule indicates that only tax credit will be granted to the inputs of the producers of the exempted goods, this will generate that the other companies that participate in the entire marketing chain and that are not producers (for example, wholesalers , retailers, etc.) are not entitled to apply the VAT on their purchases as a credit.

LOOK: SNI: Higher cost of inputs would not allow to reduce prices, despite VAT exemption

“Therefore, that VAT not applied as a tax credit will end up being included as a cost in the final price of the good, that is, it will increase its cost, which is certainly already nonsense”, I note.

In this sense, the CCL urges the Congress of the Republic to perfect the norm and to stipulate that all the IGV of purchases and acquisitions be a tax credit in order to benefit the entire marketing chain.

It is worth mentioning that the Plenary of Congress approved this measure with the aim of lowering the prices of five basic foods such as chicken, eggs, noodles, bread and sugar; the same that will enter into force from May 1 to July 31 of this year.

Norma would have no immediate impact

In addition, the business association stated that the current rule, which has already been enacted, will not have an immediate impact on its final prices, since the VAT on all purchases by sellers of exempt products is not being allowed to be applied as a tax credit.

LOOK: VAT Exemption: When will food prices drop?

He added that the issue in question had already been resolved by the autograph of the aforementioned law that was initially approved by Congress.

“That is why it is up to the Legislature to correct this serious error and provide for its immediate modification in which all the VAT on purchases, including that accumulated before the entry into force of the norm, can be used as a tax credit. , even providing that the unused credit can be compensated or returned as occurs with exporters”he expressed.

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