Bolivia's FAM Proposes Tax Incentive for Diesel Imports Amid Shortage

The Federation of Municipal Associations of Bolivia (FAM) has proposed applying the Tax Refund Certificate (CEDEIM) mechanism to facilitate diesel imports, as the country grapples with a significant shortage.

FAM President Johnny Torres explained that while the state lacks funds to purchase the necessary fuel, solutions like CEDEIM could allow entities such as the Agricultural Chamber of the East (CAO) to import diesel without incurring taxes. He noted that CEDEIM is a globally recognized method for legal tax exemptions.

Torres asserted that this approach offers a viable solution for ensuring diesel supply in the national market. He also reaffirmed FAM's demand to President Rodrigo Paz Pereira for the repeal of Supreme Decree 5676. This decree negatively impacts municipal governments, which are classified as Large Consumers (GRACOS) under the regulation.

"We have been firm in our request; there is no diesel because there is no money. Until we have a clear outlook, we will not instruct the purchase of diesel at Bs 18 per liter," Torres stated, highlighting the financial constraints faced by municipalities.

During a recent meeting with President Paz Pereira, FAM saw three of its six agenda points addressed. These included the return of 12% of the Indirect Tax on Hydrocarbons (IDH) to be incorporated into municipal budgets for 2027, the renegotiation of municipal debts with government institutions, and the progressive restoration of competencies to the central government. Torres mentioned that the returned IDH funds could finance basic infrastructure projects like street paving and public lighting in municipalities across Bolivia.