Nicaragua: Drinks Become More Expensive at the Beginning of 2020

As a result of the tax reform implemented in February 2019, at the beginning of 2020 the prices of beverages increased, mainly soft drinks sold in plastic containers.

Thursday, January 9, 2020

In February of last year, the Ortega regime approved the reform of the Tax Agreement Law, which consisted of increasing income tax from 1% to 2% for medium sized companies with higher incomes, and from 1% to 3% for large taxpayers.

Other changes decreed by this law are that now beverage importers pay taxes on the retail price of each of the products. According to businessmen, previously the amount to be paid was calculated on the basis of the volume of the shipment.

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Carmen Hilleprandt, president of the Nicaraguan Chamber of Commerce and Services (CCSN), told that "... At the beginning of the reform the prices of the drinks were maintained, some only adjusted the ISC (Selective Consumption Tax), now I imagine that they can no longer sustain it and that is why they made this adjustment now at the beginning of the year, we must remember that each company by regional issues had the hope that there would be changes, but it was not sustainable over time."

A survey conducted in distribution agencies at the end of 2018 confirms the rise in the price of beverages, since the price of the 24 units of 500 milliliters before cost $12.2 and now are quoted at $13.4, representing a 9% increase.

This situation had been anticipated by Nicaraguan businessmen, as on several occasions they asked the authorities to review the charges applied, in order to avoid transferring the extra costs to the final consumer.

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Charge for Beverages Entering Nicaragua

May 2019

Businessmen in Nicaragua denounced that because of the tax reform approved by the Ortega regime, the tax burden on imports of all types of beverages has tripled.

Representatives of the Nicaraguan Chamber of Industries (Cadin) explained that before the tax reform that was approved last February came into effect, importers paid the tax on the total cargo of beverages in each import, but now it was ordered that this must be applied on the retail price of each of these products.

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