Commodity Tax Removed from Colombian Raw Materials

Nicaragua will eliminate the 35% tax on Colombian imports, which created a a disadvantage to local businesses compared to the rest of the region.

Friday, March 30, 2012

The abolition of the tax will be effective in a few weeks and follows an agreement between businesses and the government.

Jose Adan Aguerri, president of the Superior Council of Private Enterprise (COSEP), said that the tariff be suspended by way of a reform initiative to be adopted in Parliament after 9th April.

Local businesses have experienced a rise in raw material costs when using materials imported from Colombian directly, while in other regional countries they have been able to purchase them at a lower price. "By eliminating this tax, the domestic industry can compete with Central American industry and keep us competitive," said Aguerri.

The tax has been collected since 1999 as a reprisal for the ratification of a border treaty between Honduras and Colombia which Nicaragua considered prejudicial to its sovereignty and territorial integrity.

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