- VAT collection has been increasing for a year due to a recovery in consumption
- The indicator improved in real terms for the fourth consecutive quarter according to a report from the Chamber of Commerce and Services of Uruguay
- VAT collection has risen for three quarters driven by a smaller currency difference with Argentina
- VAT collection grew by 2.3% year-on-year in October driven by VAT
- The rebound in consumption drove the sustained improvement in VAT collection
- The reactivation was boosted by higher domestic consumption supported by the smallest price gap with Argentina in over six years and the correction of Uruguayans shopping in the neighboring country
- VAT perception grew by 5.80% in real terms during the third quarter confirming the rise of 5.54% from the previous period and well above the improvements of 0.50% at the beginning of the year and 1.73% at the end of 2023
- Over the year, there has been a constant improvement in the collection from domestic consumption which was 5.22% in the third quarter following previous improvements of 3.82% and 2.11%
- VAT collection from imports was also positive with a year-on-year improvement of 6.92% although less than the previous increase of 9.02%
- The general collection has been growing in recent months largely due to the reactivation of consumption driven by higher sales as Uruguayans stopped shopping in Argentina where the price gap is at its lowest in six and a half years at 21.7% according to a bi-monthly report from the Catholic University of Uruguay
- The notable depreciation of the Brazilian real this year which intensified in recent weeks threatens to shift the shopping tourism problem to Brazil with citizens consuming in Brazil
- Merchants from the Melo Shopping Center in Cerro Largo warned in September about products costing up to 50% less and recently citizens have been crossing into Chuy where the border is less distinct than towards Argentina making shopping more logistically simple for Uruguayans
Source: ambito.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
