The Honduran government is deploying mobile stores selling basic goods in a bid to crack down on “speculation” by companies in the wake of an increase in business taxes meant to narrow the country’s deficit.
The government said today that 20 mobile stores will travel through the capital, Tegucigalpa, and the northwest city of San Pedro Sula selling goods including flour, beans, rice, sugar and soap to the country’s poorest citizens. In a country with the world’s highest rate of violent crime, the mobile units will be protected by the military, the government said.
“This is meant to stop and contain abuses inflicted by some businesses through their price speculation of basic goods,” according to the statement.
Honduras eliminated some tax exemptions and raised duties on companies as President Porfirio Lobo seeks to narrow a budget deficit that reached 6 percent of gross domestic product last year before his successor, Juan Orlando Hernandez, takes office Jan. 27. Finance Minister Wilfredo Cerrato said Jan. 8 that some companies raised prices 50 percent to compensate for the higher taxes.
The heads of the country’s business chambers met today to discuss the new tax plan, which they said affects competitiveness in the $18 billion economy, according to a report in newspaper La Tribuna.
Lobo on Dec. 30 blamed previous governments for creating what he said was a “fiscal snowball” resulting from paying debt by issuing more expensive shorter-term notes. The government will pay 29 billion lempiras ($1.4 billion) to service debt this year, Cerrato said, 10 billion lempiras more than last year.
Honduran dollar bonds have returned 13 percent the past three months compared with a 0.2 percent return for emerging markets, according to JPMorgan Chase & Co.’s EMBIG index.