2023-07-03 22:16:12
The Industrial Promotion Regime in force in Tierra del Fuego is controversial to say the least. It is that this program generates tax and customs benefits for companies, which have great tariff protection that harms national consumers.
In this context, we communicate with Juan Carlos Hallakeconomist and CONICET researcher, who spoke regarding this program and its economic impact in the country.
Industrial Promotion Regime, an unfeasible program
“It is not convenient for this to continue like this. We did a very large study and the conclusion is that it is a regimen that did not work,” said Hallak, who later completed: “We managed to have a population on the island but it is super expensive for us.”
“The sub-regime generates a very high fiscal cost. The main problem we detected is that billing is rewarded and not the added value of the companies”, explained the expert. “Much of the product is manufactured outside and comes in as a kit, these inputs do not pay VAT or import duties”, he detailed.
Likewise, the economist said that the producing companies keep the VAT. “You have to realign it to incentives that give added value”revealed the researcher. “Part of the bad design of the regime is that the incentives are oriented to the internal market, there is no differential to export”, he complemented.
Reconvert the program
Then, Hallak said that the money that might be saved by interrupting the program might be invested to develop activities that are profitable in the southernmost province of the country.
“Tourism and the knowledge economy, as well as fishing and hydrocarbon exploitation are viable. It is full of activities with great potential, management is needed to develop activities that can export”, he explained.
Likewise, the interviewee said that in order to be profitable, the activity must be able to target markets other than the domestic one. “You cannot compete with India, China or Taiwan”concluded the economist.
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