From May 1 to July 31, the exemption of the General Sales Tax will be in force (VAT) to five products of the basic family basket, as established by the Government.
The products to which the VAT will not be applied, and therefore would receive an 18% reduction in prices, are: chicken, fresh chicken eggs, sugar, pasta and bread. Although the rule came into force on May 1, during this week it has been possible to appreciate a variation in the costs of certain products in the markets.
How much is a kilo of chicken?
The Poultry Marketing and Price Bulletin of the Ministry of Agrarian Development and Irrigation (Midagri), published this Wednesday, registered lower chicken prices compared to April. A kilo of chicken cost an average of S/ 8.12 last week, but on Wednesday it registered a cost of S/ 7.75 per kilo at retailers.
In this sense, CĂ©sar Santisteban, director of Statistics and Agricultural Promotion of Midagri, said this week that the price of chicken was at one of its lowest levels of the year.
It should be remembered that in previous months, the price of chicken exceeded S / 11 per kilo.
However, Julio Favre, President of the Peruvian Poultry Association (APA), affirmed that the reduction in the price of chicken that has been observed in the markets in recent days does not respond to the rule that has exempted some foods from VAT, if not to supply and demand.
How much does bread cost in Lima?
In bakeries in Lima, the price remains between 30 and 40 cents per unit, and it seems that this cost will be maintained in the following days despite the exemption. But why hasn’t the price of bread gone down?
In this regard, Mario Flores, representative of the Peruvian Association of Bakery and Pastry Entrepreneurs (Aspan), pointed out this week that the VAT exemption does not directly influence the final cost of the product, since there are other factors involved in the preparation of bread that are not taken into account; for example, gas and electricity service expenses, personnel expenses, machinery expenses, etc.
In addition to this, there is the high cost of inputs for bread making, which have risen due to the international context and have remained at these levels to date. “Then, in this situation we have to maintain the price we have to respect the structure of elaborated costs,” Flores says.
Aspan’s representative added that they could not reduce the price of bread, since that depends on the direct and direct costs of the sector. On the other hand, the representative of the union affirms that the price of bread could not rise any more, since the demand would reduce and this would be counterproductive for business.
Other products exempt from VAT
According to the Midagri Price and Supply System (Sisap), the prices registered this Friday, May 6, of the other products contemplated in the norm, which are rice, noodles and eggs, have not changed compared to April 29 .
Regular rice had a price of S/ 2.47 per kilo in the wholesale markets of Metropolitan Lima, while bulk noodles came to cost S/ 4.40. Both products showed a decrease of less than 10 cents.
On the other hand, a kilo of pink eggs registered this Friday a price of S/ 6.70, while last week it cost S/ 6.80, according to the Midagri platform.
