Paraguay's customs revenues reached a total of 763.072 billion guaraníes at the end of March of this year. The amount collected was at a -6,3% below of the income of 814.044 million guaraníes registered in March 2019, as a result of the impact of Covid-19, reported the National Customs Directorate (DNA).
It should be noted that this reduction recorded for the reference month was accentuated more by the sanitary restriction measures decreed by the Paraguayan State to deal with the pandemic. Until the second week, there was a strong growth in collections with a daily average of 41.498 million guaraníes. However, from the third week onwards, there were slowdowns until the end of March, a period in which the daily average of collections reached 24.687 million guaraníes.
Impact of sanitary measures
The average participation of the Registered imports of Chinese origin, represented in the last four months, the period of beginning of the health crisis, around 34,2% of total imports, equivalent to approximately 308,3 million US dollars.
In this context, imports from China have shown a monthly drop of -2020% from February to March 27,7. This reduction in Chinese imports has caused a loss in customs revenue of 19 million dollars, representing around 55% of the loss of total revenue potential, which amounts to approximately 34 million dollars in March 2020.
In the same sense, when analyzing the top 5 of the imports by country of origin, 69,6% of the total collection recorded in the month of March came from imports from 5 countries of origin, positioning itself Argentina with a 20,5% share of total revenue, China with 19,9%, Brazil with 16,2%, the USA with 9,7% and Japan with 3,3% representing approximately 80,8 million dollars.
At this point, it can be seen that Tax collections on imports of Chinese origin have been displaced by tax collections on imports from Argentina, a phenomenon that has occurred due to the cessation of production in several industrial branches in China due to Covid-19, which has caused a reduction in the supply of these products that impacted on a reduction in imports from the aforementioned country.
This decrease in customs revenue, given the drop in imports of Chinese origin by -32,4% compared to the same month of the previous year, equivalent to approximately 95 million US dollars, has been the fall with the greatest negative impact on customs revenue.
This is also visible, to a greater extent, at the level of income of main sectors such as IT and telecommunications, which observed a year-on-year drop of -41,4%, machines, appliances and electrical material and their parts -5,4%, capital goods -46,8%, toys -51,8%, textile manufactures (clothing and clothing accessories) -48,6% and in the sector of boilers, machines, appliances and mechanical artifacts of -16,6%, among the most important.
Likewise, growth has been recorded in other main sectors, but to a lesser extent, such as the electronics sector with an increase of 9,4%, spare parts (auto parts) 15,7%, vehicles 23,0% and in the fertilizers sector 87,5%, among others, which has attenuated a greater decline.
The items with the greatest negative impact on the customs revenues of the reference month were information technology and telecommunications; vehicles; textile manufacturing (clothing and clothing accessories); agrochemicals; chemical products; paper and cardboard; toys; beverages; electrical machines, appliances and materials and their parts; furniture; various common metal products (tools, cutlery, fittings and others); spare parts (auto parts); rubber and its products; plastics and their products; ceramic products; residues and waste from the food industry and prepared animal feed; stone, plaster, cement, asbestos products; mineral products (cements, lime, salt and others); food preparations based on cereals, flour, starch, milk and pastry products; essential oils, perfumes and cosmetics; etc., among the most important.
The sectors with the greatest positive impact were fertilizers; electronics; tobacco and cigarettes; boilers, machines, mechanical devices and appliances; optical, photographic or cinematographic instruments and apparatus; glass and glassware; pharmaceutical products and medicines; fuels and other petroleum products; etc., among the most important.
Tourism Regime
In the regional context, the scenario of slowdown in the Brazilian economy, the strong depreciation of the real against the US dollar, plus the current health situation that has led to the adoption of strong measures such as Closing of the Friendship Bridge, negatively impacting border demand, and therefore, a decrease in imports given the existence of merchandise in stock, have limited the potential for collecting customs revenues for the reference month.
Likewise, this impact It is reflected in a certain way in the tourism regime, in general terms, imports of goods under this regime have registered significant decreases in the collection by -24,6%, in the taxable Guaraní and in the imported volume by -24,4% and -18,4% respectively.
On the other hand, when analyzing the behavior of imports under this regime over two time periods, specifically starting from March 16, the date on which the partial closure of borders was decreed, a notable drop in all concepts can be observed. It should be noted that customs collection under this regime represents about 12% of total customs revenue.
On the other hand, the customs administrations that obtained a surplus in March, compared to the same month of the previous year, are highlighted, among which the following stand out: Nanawa, Algesa San Juan Itapua, Concepción, Villeta, Pto. Seguro Fluvial, Terport-Villeta, Itá Enramada, José Falcon, among others.
In terms of DNA's contribution to mitigating the impact and dealing with Covid-19, it consisted of prioritizing and expediting the entry of critical goods and supplies related to pharmaceutical products, medicines and pulmonary respiratory devices, as well as guaranteeing the supply of food and fuel, ensuring the normal development of international trade through the customs offices authorized for this purpose.
Likewise, the extension of the deadlines for tariff reductions on 162 tariff items until June 30, 2020 in accordance with Decree No. 3471-20, as well as the provision for reducing VAT applied to goods that have had customs tariffs reduced to zero percent by Decree No. 3477-20.
Customs revenue in March fell by -6,3%, less than expected, thanks to good revenue in the first half of the month
Revenues for the third month of the year were US$ 116 million, equivalent to US$ 34 million less compared to the initial estimate pic.twitter.com/CE1WlD9Jya
— Customs – Paraguay (@aduanapy) April 1, 2020
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