Mexico raises the tax on sweets (and it’s not a meme)
It seems that the federal government got tired of illegal sugar being passed under the table and decided that, if the import party cannot be controlled, at least it is going to charge a very expensive entrance fee. In a move that has left everyone more surprised than when they canceled your favorite series on Netflix, they announced a radical change in the tax scheme for importing the sweetener. Starting today, the move is simple: if you want to bring grain sugar, beet sugar or syrup to Mexico, you will have to pay a 156% tariff. But if your taste is liquid, refined or inverted, prepare for the real sugar shock: a tariff of 210.44%. Yes, you read that right. Basically, the message is “if you want to bring it, it’s going to hurt.”
The justification, published in the evening edition of the Official Gazette of the Federation with all the governmental pomp, is that the previous tariff of 360 dollars per ton, in force since we all listened to cassettes in 1994, was no longer enough. According to the authorities, this outdated charge “does not offer sufficient protection to the national agribusiness” in a world where international prices for the product have plummeted. In other words, it was like arriving at a pitched battle with a slingshot.
The art of importing sugar without paying (or how to be creative with the law)
Sources from the sugar sector, who must be between euphoria and skepticism, assure that this new tax, which will be applied to the price of the sweetener, should significantly inhibit imports. The underlying reason? It turns out that considerable increases had been detected in the entry of this sweet under quite creative illegal practices, coming from countries like Brazil, Guatemala and India.
For example, the authorities had already discovered that sugar was imported from Guatemala declaring it as “food mixtures”, a ruse worthy of a drug trafficker’s script, but of glucose smugglers. And if that were not enough, there is also sophisticated technical smuggling from India, a giant global producer. Basically, it is the less glamorous side of international trade, where the imagination to evade taxes has no limits.
Experts say: “Good, but don’t get excited”
Meanwhile, those who really understand the gossip, like the Agricultural Market Consulting Group (GCMA), gave their verdict with the coldness of a reality show judge. They described the increase in the sugar tariff as “a correct measure but insufficient to balance the market.” In Christian: “Nice try, but it’s not enough.”
The consultants noted that it is crucial to protect domestic producers with additional measures. This would include, attention, that United States expand its import quota of Mexican sweetener, and that the Secretary of Economy negotiate a scheme equivalent to the volume of high fructose syrup that crosses the border. Basically, they ask for a fair exchange in this relationship as complicated as any situationship.
But the most critical point is the urgent call to combat smuggling and undervaluation, including that shady practice of using different tariff fractions to sneak the product. And, very important, that this increase is not passed on to the final consumer, keeping prices stable so that everyone does not end up paying the boss. The GCMA was clear: “the tariff adjustment is a step in the right direction, but without control of smuggling, equity in trade with the United States and discipline in internal prices, the impact will be limited.” In other words, it’s like putting a band-aid on a wound that needs stitches.
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