Uruguay announces bill granting tax benefits for border businesses

RIO DE JANEIRO, BRAZIL – The government of Uruguay has designed a bill with measures including tariff reductions, tax benefits, and contributions, which will reduce costs for micro, small and medium-sized companies located on the country’s borders with Argentina and Brazil.

The measures will be in force for one year, and the proposed benefits will be passed on to prices, according to the Secretary of the Presidency, Álvaro Delgado.

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The announcement was made this week, with the participation of the Undersecretary of the Ministry of Economy and Finance (MEF), Alejandro Irastorza. The bill to be submitted to Parliament this week contains compensatory measures for the commercial sector of the borders, affected by the exchange rate difference, and it is made before the next opening for those areas.

Delgado pointed out that the measures are aimed at the retail trade, whose gross income in the last fiscal year, before the enactment of the law, has not exceeded 4 million indexed units, about 20 million pesos (US$465,000) of invoices per year.

In addition, they must be located no more than 60 kilometers from the border and cover 85% of the companies of the segment in the border.

The initiatives were proposed to “provide stimulus, competitiveness and improved operating and fixed costs” to all border businesses. They also respond to a will of the Executive Branch that arises from the exchange with the commercial centers and national and departmental legislators, and that incorporates as input other bills.

In addition, it was reported that large companies would be exempted from the advance payment of the tax on income from economic activities (IRAE) and the advance payment of the wealth tax.

“We are thrilled with the contributions that have been made,” highlighted the mayor of Río Negro. Lafluf recalled that, in that department, there are 4,017 businesses, of which 60% invoice up to 1,500,000 pesos a year, and 43% are single-taxpayers. He also informed that the benefit of 24% in the fuel rate is maintained in those stations located within 20 kilometers of the border crossing.

“The measures announced by the government contemplate some of the proposals made”, said Andrés Lima, head of the Department of Salto. The mayor of Salto considered the possibility that these exemptions would later be transferred to prices. He recalled that 75% of the MSMEs in Saltom some 6,697 companies, invoice less than 1,500,000 pesos per year.