“The government does not assume the cost of the subsidy but it is assumed by the generating companies and the distribution companies, 50% and 50%, they are subsidizing it in exchange for perks and economic policy measures that the government returns to them” 2024-04-27 04:51:01

“The government does not assume the cost of the subsidy but it is assumed by the generating companies and the distribution companies, 50% and 50%, they are subsidizing it in exchange for perks and economic policy measures that the government returns to them”
 2024-04-27 04:51:01

In the Encuentro interview with Julio Villagrán, the economist Julia Evelyn Martinez and the executive director of the Center for Consumer Defense, Danilo Perez, debated the Salvadoran economy, where they touched on the issue of the residential electricity rate in El Salvador , which has the highest prices in the entire Central American region.

In addition to having the highest residential rate, El Salvador applies VAT, Panama, Costa Rica and Honduras do not apply VAT.”reiterates Danilo Perez.

“El Salvador is the country in the region that produces the most expensive energy, production is the most expensive”highlights the economist.

The majority of the Salvadoran population is charged the highest prices and other sectors such as the industrial sector are charged lower rates, adding to this situation, the country has increased its export of electrical energy.

Last year, El Salvador ended up exporting energy in the order of 74.6 million dollars, an increase of 86% compared to 2022, it is selling energy.”explain Perez and Martinez

For the economist, the government is not the one who assumes the cost of the electricity subsidy, but rather the generating and distributing companies, which is why the best benefits are for large companies and do not benefit microentrepreneurs.

Furthermore, the government is using geothermal energy inefficiently to mine Bitcoin, says the economist.
They annually give 650 million dollars in tax extensions to large companies, while they charge microbusinesses taxes per month… The government does not assume the cost of the subsidy but rather the generating companies and the distribution companies assume it, 50% and 50%. “They are subsidizing it in exchange for perks and economic policy measures that the government returns to them.”says Julia Evelyn Martinez.

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