Venezuela’s government has scaled back the number of items that can enter the country free of import taxes, in a move to bolster local manufacturers that risks undermining the supply of goods to shops.
From January 1, a total of 4,792 out of the 8,081 previously-exonerated codes for imported products will pay import and value added taxes again, according to a copy of the Official Gazette obtained by Bloomberg. The document was published on 26 December but has not been made public. The measure aims to “protect local industry” and to “continue building 21st Century Bolivarian Socialism.”
Imported goods such as apples, sour pickles, nuts, codfish and wines have poured into stores thanks to the tax exemptions in force since August 2018 and a de facto dollarization. While the measure helped to replenish the shelves of some of the nation’s supermarkets, many of the foreign products entering Venezuela remained too expensive for its hunger-stricken people.
From Wednesday, only 3,289 items will continue to be exempt, including industry inputs such as fiber optic components, chemicals and machinery, to HIV and cancer treatment, car parts and food.Small luxury stores known as “bodegones” and supermarkets will see their stock of imported goods easing on the new rules, said Cipriana Ramos, a member of the Commerce Chamber of La Guaira, Venezuela’s second port. But this might benefit local producers, she said.
“Venezuelan manufacturers complained to the government about unregulated goods entering the country without paying taxes, affecting their products,” she said. “Now this seems a step further in protecting national industry.”
Venezuela reported a 82% decrease in production during the third quarter of 2019 compared with the same quarter of 2018, according the country’s chambers of commerce, Conindustria. Forty-two percent of business owners surveyed said they expected to be in business for no longer than 6 months to a year more.
