Umpih warns that the price of bread could rise due to the increase in costs of ingredients
The price of bread could increase since some ingredients for its production have increased by more than 15%, as reported yesterday by the Union of Small and Medium Industrial Flour (Umpih). So they asked the authorities to meet with producers and seek a solution to avoid a rise.
According to the president of Umpih, Aaron Dinzey, the price of a sack of flour rose by around RD$200, while fat, sugar, and packaging also increased.
He said that bread is free of the Tax on the Transfer of Industrialized Goods and Services (Itbis), but with the exception of flour and water, all other ingredients are taxed at 16% and 18%, increasing the cost of production.
“Until 2012, there were standards where ingredients for the manufacture of bread were exempt from taxes, but these standards were no longer applied from that year. The materials are recorded with taxes, but the bread producer can not transfer that Itbis to the final product because it is a tax-free product,” he said.
Dinzey said that bread producers do not want to increase the price, so he reiterated the call to authorities to meet with producers and seek a solution.
“We want to continue producing. We do not want to increase the price of bread. Ingredients should not be subjected to Itbis because bread is an exempt product. The rules say that in a product exempt from tax, the raw material should also be, but in our case, it is the opposite,” he reiterated.
Closed bakeries. Speaking about the effects of the pandemic on the sector, Aron Dinzey said that because of the covid-19, there are 167 bakeries closed, which has caused the loss of about six thousand direct jobs.
“This is from March 19th that the pandemic started in the Dominican Republic,” Dinzey said.