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.

You may be interested in "Beverages: Consumer Trends and Preferences"

Carmen Hilleprandt, president of the Nicaraguan Chamber of Commerce and Services (CCSN), told Laprensa.com.ni 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.

Do you need more information about your business sector?

Request more information:








this site is protected by reCAPTCHA and Google's privacy policy and terms of service.
Need assistance? Contact us
(506) 4001-6423


More on this topic

Political Reform to Boost the Economy

March 2020

Nicaraguan businessmen believe that electoral reform is essential to reactivate the country's economic activity, which has been in decline since the crisis erupted in 2018.

According to estimates by the International Monetary Fund (IMF), Nicaragua's Gross Domestic Product contracted by 5.7% in 2019, a drop that complements the year-on-year variation of -3.8% recorded in 2018.

Beverages: Taxes Still Not Reviewed

December 2019

As a result of the tax reform implemented in February 2019, Nicaragua tripled the tax burden on imports of all types of beverages, and nine months later, businessmen are still waiting for the government to review the collections.

On February 27, 2019, the amendment to the Tax Concertation Law was approved, which consisted of raising from 1% to 2% the income tax for medium sized companies with higher income, and for large taxpayers from 1% to 3%, the livestock sector has reported considerable increases in its production costs.

Reversal in Air Freight Collection

June 2019

In Nicaragua, authorities reported a decision to suspend collection of the additional fee of $0.05 for each kilogram exported or imported by air.

The extra charge came into effect last April 25, but from the beginning the private sector spoke out against it, because it was argued that the tariff that the Nicaraguan government would apply, would put some local companies on the border of closure and cause a decrease of about $50 million annually.

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.

 close (x)

Receive more news about Beverages

Suscribe FOR FREE to CentralAmericaDATA EXPRESS.
The most important news of Central America, every day.

Type in your e-mail address:

* Al suscribirse, estará aceptando los terminos y condiciones


Cabcorp

Organization that operates in Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.
Phone: (502 ) 2422 6000

Company Profile

Stock Indexes

(Apr 6)
Dow Jones
-5.60%
S&P 500
-5.10%
Nasdaq
-5.64%

Commodities

(Mar 30)
Brent Crude Oil
27.1
Coffee "C"
116.75
Gold
1,658
Silver
14.56