Daily Archives: March 18, 2013

Now that Venezuela’s wallet has shrunk, current Bolivian gov gets creative… in their usual bad and unproductive way

Bolivian elections year is 2014, current Bolivian central government needs cash, urgently!! and their Venezuelan wallet is in peril… or will cease to provide… in any case the following news is another proof of a haphazard and counterproductive way of public intervention. In the past, I bought some things just because they were on sale… with this control, companies will be affected and consumers will see their purchase value go underway.

Pagina Siete reports:

The Game Authority controls all kinds of contests

Norm that stops promotions affects millions of consumers

MANAGEMENT. A law, promoted by the Minister of Economy, forcing the banking, supermarkets, pharmacies, phone and gas to suspend promotional campaigns.

2013-03-17 09.13.10 amIn recent weeks, several companies decided to suspend or considered future suspension of the majority of their business promotions due to a new regulation of the Authority of Control and Social Control Game (AJ) which controls all business promotion, which affects millions of users or consumers.

The affected companies include, for example, the Ketal supermarket, which already does not deliver the so-called “points” for each purchase; the BNB, granting discounts for purchases with their credit card in certain trades, and BoA airline, giving benefits to frequent clients, plus the exchange of soft drinks’ caps for awards redemption.

Some sectors that decided the total or partial suspension of business promotions are soft drinks, banking, supermarkets, cement, pharmacy, telephone chains, mass distributors of beauty products and others, reported Fernando Mirabal, Manager general of the Chamber of Commerce. Users of promotions are counted by millions throughout the country, it is estimated by the Chamber. Only mobile phone users amounted to several million.

The problem arose because the 317 Act and its regulations, proposed by the Minister of Economy, Luis Arce, modified the law 060 of lottery games and gambling and expanded control of the AJ to all types of business promotions. The law aims to raise revenues through a tax, seeking to obtain 10% of the value of all promotion or sweepstakes.

The Chamber of Commerce reported that one of the reasons why entrepreneurs decided to suspend their promotions is the surcharge makes impracticable many of them. The other reason is that the AJ must approve each promotion and the delay makes it impossible to perform.

The lawyer Rodrigo Monroy also added that the current standard does not include various types of business promotions. It gave the example of discounts with which a bank cardholders benefit when they shop with their credit card. As it is not known how many of them will take advantage of the offer, it is impossible to determine the cost of the promotion in an early manner, which is what is required by the existing regulations.

Mirabal said that no country in the hemisphere has a standard so restrictive.

Affected business sectors say that, apart from the increase in the cost, “the increase in bureaucracy that entails asking a permission for each business promotion is irrational and unnecessary”.

A telecommunications Executive said that “if what the Government intends to increase is tax revenue, it is simplest to set a fixed fee for promotion and avoid all this bureaucracy that hurts everyone”.

According to the standard, every promotion should be evaluated by the AJ before being released to the market. Employers noted that the AJ does not have the infrastructure to appropriately process all business promotions that are created every day. For example, only have offices in La Paz, Cochabamba and Santa Cruz, and if a company from another city wishes to make a promotion it should be moved to one of these capitals.

Penalties for non-compliance with the rules are high: a publishing company of books paid a few months ago a fine close to Bs40,000 for the lottery of goods-baskets and books that had not been registered in the AJ.

Monroy said the new law will slow the economy and hurt the private sector because it deprived them of an important management tool. But also government revenues may be affected as to suspend promotions sales decrease and tax collecting less revenue for IVA, IT and IUE.