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| Fernando Jaramillo, Corporate Affairs VP; Barry Smith, President, SABMiller Latam; Karl Lippert, President, Bavaria. Photo: Bavaria, S. A. |
Decree 127 of 21st January 2010 issued by the National Government increased beer tax in 11%, from 51 to 62% as of February. However, the decree has an additional scope, because as of 1st of January 2011, two points will be added to the VAT, for a total tax of 64%, the highest in Latin America.
This has been clarified by Bavaria in its Press Release published today, whereby it establishes the Company’s position regarding the decisions indicated.
“We express our solidarity to the difficult situation of Colombians”, the company indicated after reviewing the background of these measures. However, it added that “health finance aspects become more and more dependant from the beer industry, which is inadequate, in addition to being unfair”.
As to the figures, the company indicated that beer in Colombia had a total tax of 51%, 40% out of which corresponds to excise tax and 11% to VAT, broken down as follows: a non-deductible 8% for the Departmental Health Secretariats and the District Capital, and 3% for the general State budget. After the Decree, the tax structure was adjusted to the following: 48% excise tax (+8%) and 14% VAT (+3%), amounting to 62%. As of January 1st, 2010, VAT will increase to 16%.
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Press Release
22 JANUARY 2010
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