Government studies excluding freight on more than 300 products to try to control inflation

The global economic situation has caused an increase in the prices of imported products, inputs, raw materials and others that end up affecting the pockets of citizens and local production. Faced with this situation, the government has excluded some sectors from tariffs, and is now considering doing so to 327 others including wheat.

According to the Ministry of Commerce, Industry and Tourism, this was the recommendation made by the Committee on Customs, Tariff and Foreign Trade Affairs (Triple A) and a first draft decree was already published to exclude the value of freight charges and charges associated with that quantity of goods, from the taxable base on which is settled customs taxes (tariff plus VAT).

Initially, it is proposed to exclude freight charges for a period of 6 months, with the possibility of extending it for another 6 months, in accordance with the recommendations made after the first period by the Triple A Committee.

“At present, the taxable base on which these taxes are calculated is the CIF value of the imported product, which is equal to the FOB+freights+insurance value. On this basis, tariffs and VAT are charged, so the recommendation would reduce the taxable base to avoid transferring the increase in international freight rates to economic operators, both producers and consumers,” said MinCIT.

In practical terms, it seeks to generate relief in the costs of production and some final goods, which have been impacted by the high prices of raw materials and the international costs of transporting imported goods.

The measure envisages sheltering various products such as fertilizers and fertilizers that are necessary for food production in the country and are purchased on the foreign market. Likewise, some food and final goods that are part of the basic basket are included.

Among them, as quoted by the newspaper El Tiempo, include beef, pork, bacon, beef liver, milk powder, cheeses, dairy products and whey, bulbs, onions, tubers, long onions, red onions, chickpeas, edible oils, sausages, ham, cereals and essences.

Also added to these items are for body hygiene, confections, toilet soaps, detergents, animal skins, toilet paper, make-up wipes, sanitary pads, tampons, micellar water, soda and non-dairy formulas for children or milk for calves, among others.

The possibility of adopting such a measure is also based on a decision of the Andean Community (CAN) which on 16 March allowed member countries to temporarily reduce a certain percentage of transport and related costs of imported goods, which form part of the customs value of the goods.

“Together with the Agriculture and Treasury portfolios, we are constantly evaluating measures to alleviate the impact on Colombians' pockets due to the rise in prices, largely caused by world circumstances,” explained the Minister of Commerce, Industry and Tourism, María Ximena Lombana Villalba.

The official said that this recommendation is already endorsed by the Superior Council for Fiscal Policy (Confis), which presides over the Ministry of Finance, because it involves fiscal costs. On the basis of this approval, the draft decree published for public comment was drawn up.

On June 25, the decree that excluded wheat from freight in 2020 expires. The Triple A Committee recommended extending this measure for two more years due to inflationary pressures from the basic basket that has arisen throughout the year and could be complicated by the war, a month ago, in Ukraine.

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