An important warning that current government should consider seriously as in the past, the black market on dollar exchange has caused inflation, speculation and less competitiveness to our economic activities.
From Los Tiempos:
BY TAX BURDEN | The national private banking provides that it will have to abandon the sale of foreign currency because of the losses generated by the tax to the sale of dollars
Asoban alert incubation of the dollar black market
The Banking [system] warns of possible incubation of a parallel market for the dollar, due to the heavy losses caused by the tax on the sale of foreign currency, which will have the banking system to stop to provide that service, which would create an illegal market, states a note released yesterday by the Association of private banks in Bolivia (Asoban).
The institutional declaration urges to revise the rule, request already formulated to the Ministry of Economy and to the Central Bank of Bolivia (BCB), without response.
This tax is valid from December 5, 2012, with the promulgation of presidential decree 1423, which regulates and puts into effect the tax to the sale of foreign currency (IVME), measure that aims to deepen the use of Bolivian currency and reduce the profit margin of the banks.
The rule establishes the payment of 0.70 percent on the sale price of foreign currency to banks and 0.35 percent for the Foreign Exchange companies.
According to Asoban, the losses from the sale of dollars will be increasing as the banks will sell dollars that were bought in the past, to a lower exchange rate, and already can not buy dollars in the market, except from the BCB, which will result in one greater loss if they continue to operate in the foreign exchange market.
To illustrate the magnitude of the losses, the letter says that the earnings per Exchange operations of the banking system, to January 31, 2013, reached $8.3 million dollars and losses to $3.1 million. Thus, the net profit by the exchange operations amounts to a total of $5.2 million and tax the sale of currency to $3.6 million dollars, leaving a net gain for the banking system, after the payment of the new tax, of $1.6 million for the first quarter of the year, the amount has no comparison with the $5.2 million generated in the same period, in 2012.
“As immediate effects of this measure, it is no longer possible for financial intermediation institutions to grant preferential exchange rate to their customers and, worse still, meet the requirement for purchase of foreign currency to the public in general, causing the banks to stop providing those operations and, possibly, the creation of a parallel market of currencies outside State control” explains the letter from Asoban.
– Taxes on the sale of foreign currency (IVME) to March 31, 2013 were more than $10 million, representing 63 per cent of the net profit for Exchange operations by the banks, says Asoban.
– The Decree of the IVME points out that said tax cannot move the cost to the public, who must pay is the financial institution.