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Work Continues on Value-added Tax Issue in Honduras

Honduran-Pork-US-Exports

As we first reported last month, the government of Honduras is in the process of rescinding a number of consumption tax exemptions. Fresh and frozen pork are currently exempt from Honduras’s 15 percent value-added tax, but a legislative effort is underway to rescind the exemption for frozen pork. Not surprisingly, the vast majority of frozen pork is imported while fresh pork is almost entirely domestically produced.

If frozen pork is subjected to a 15 percent value-added tax, imports will be at a decided disadvantage compared to domestic pork. The tax could also apply to some beef cuts and processed items entering Honduras, but the list of products has yet to be finalized. USMEF has been working with U.S. Embassy staff on this issue for some time, in an effort to register our concerns with the Honduran government and keep the list of meat products subject to the value-added tax as narrow as possible. USMEF will provide further updates as more information becomes available.

Honduras was the 10th largest destination for U.S. pork/pork variety meat exports last year in both volume (22,492 mt, +12 from 2012) and value ($52.8 million, +14 percent). U.S. pork exports to Honduras have grown steadily since Honduras implemented the U.S.-Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) in 2006.

While Honduras is a much smaller market for U.S. beef, last year’s beef/beef variety meat exports increased 20 percent in volume (1,245 mt) and 22 percent in value ($5.1 million) over 2012.