Mario Cerna, Vice Minister of Commerce and Industry in the MINEC, said half of the resources will go to "non-reimbursable funds for co-financing of all types of business."
Laprensagrafica.com outlined in their article: "The rest of the money will be divided between efforts to promote export products and returns associated with the purchase of supplies and other components to boost the sector. In the coming years it is expected to maintain the amount of resources or increase them."
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The Minister of Economy submitted to the National Assembly a draft bill that would remove the 6% export incentive.
Hector Dada Hirezi, Minister of Economy, said the country has had the obligation to eliminate this incentive since 1990.
"The continuity of this incentive had generated claims from some trading partners, mainly from the Dominican Republic, with whom El Salvador has had several trade disputes due to this issue.
The regulation establishing export incentives for "draw back" substitutes is still pending approval in El Salvador.
During the inauguration of the Third Meeting of Exporters, the Exporters Corporation of El Salvador (Coexport) called on the Government to establish the dates for the entry into force of the regulations on the Law for the Promotion of Production, which establishes new incentives.
Among incentives applied in short term is the implementation of improved energy rates and changes in collection of VAT.
“Fearing a drop of up to 15% in exports caused by the elimination of the 6% subsidy, Rigoberto Monge, advisor to the Salvadoran Association of Industrialists (ASI), said the proposal of the Ministry of Economy (MINEC) should be supplemented with the creation of very specific tools supporting the industrial sector and exporters," reports the article in Laprensagrafica.com.
The Economy Ministry announced that the ‘Drawback’, a 6% incentive to exporters, will not be paid anymore in 2011.
Exporting companies are working with the government to devise a gradual elimination plan, to be executed this year.
Economy Minister Hector Dada explained that by the end of 2010 the 6% subsidy must be eliminated, because the government assumed the commitment committed to do so in the past.