Uruguay proposes law to boost competitiveness and cut living costs

Uruguay's government has introduced a comprehensive bill designed to enhance the nation's competitiveness and reduce the cost of living, with the overarching goal of stimulating job creation and investment. The proposed legislation, comprising over 240 articles across four chapters, is the result of collaborative efforts involving four ministries and extensive public consultations with business chambers, unions, academia, and civil society.

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the heart of competitiveness lies in management costs.

Economy and Finance Minister Gabriel Oddone described the bill as a series of "micro-management reforms" and a "modest reform of the state," noting that Uruguay's last major state review dates back to 1995. He emphasized that while Uruguay's macroeconomy is currently stable, "the heart of competitiveness lies in management costs." The initiative seeks to alleviate the regulatory burden on economic actors, which Oddone stated can sometimes impose an "extraordinary weight" on taxpayers due to a lack of deep reviews.

The proposed law advocates for the repeal of obsolete legislation, citing a 1941 rule requiring butcher shops to close on Sundays as an example. To streamline administrative processes, the bill plans to establish unified registries and implement "positive administrative silence," where a request is automatically approved if not addressed within a specific timeframe. It also aims to digitize foreign trade, introduce self-customs clearance, extend sanitary and technical registrations to ten years, and eliminate mandatory translations for documents in English and Portuguese.

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an extraordinary weight

Regarding the cost of living, Oddone clarified that the bill does not include direct price reduction mechanisms but rather seeks to create an environment conducive to companies lowering their operational costs. A significant focus is placed on micro, small, and medium-sized enterprises (MSMEs), which account for 65% of the country's employment. For these businesses, the proposal includes a graduated tax system, an integrated management and invoicing system, and reduced product registration costs. The government plans to submit the bill to the legislature next week and is open to suggestions from all political parties, as it lacks a sole majority to pass the text.

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micro-management reforms