Finance ministry backs exec branch's objections to high tech incentives bill

- Wednesday, October 12, 2011

Finance ministry backs exec branch's objections to high tech incentives bill

The partial objections presented by Paraguay's executive branch to a bill that would provide incentives for production, development and assembly of high technology products are reasonable and ought to be accepted by congress, the finance ministry said on its website.

According to the ministry, countries in the Mercosur bloc cannot unilaterally abolish or modify import tariffs when there is a customs union and common external tariff regime agreed upon by the member states.

These regulations incorporated into national legislation cannot be altered by local laws, which would constitute a violation of international conventions, the ministry said.

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The finance ministry and the national tax office must therefore take part in the regulation and the granting of tax benefits. But the bill approved by congress identifies industry and trade ministry as the sole implementing authority.

According to the finance ministry, the subsidies should be directed only to companies engaged in production or assembly of high technology goods, and not to suppliers.

Paraguay's senate approved the bill in August. According to its author, congressman David Ocampos, the law will be applicable for the production, development and assembly of high technology goods in electronics, telecommunications, IT and scientific research.

The law is expected to foster technological development in the country and boost the national economy.