2024-04-07 14:09:23
In Quito stores, up to four months of grace are offered to convince customers to buy appliances in these last days of March before the VAT increase.
Sales in household appliance retailers are accelerating a few days before the Value Added Tax (VAT) rises. Starting Monday, April 1, 2024, the rate will be 15%.
This occurs because household appliances have higher prices than those for daily consumption and the tax increase will affect these goods more. That is why buyers are taking advantage of the last days in which they will be able to buy these goods with 12% VAT.
“The higher the price of the item, the customer will feel like they are paying more, especially with imported appliances,” says Fernanda Espinoza, a salesperson at an appliance store on Avenida Unidas, in northern Quito. There are around eight stores selling household appliances on United Nations Avenue.
According to the National Institute of Statistics and Censuses (INEC), nine household appliances that have VAT are in the basket of products consumed most by a typical household in Ecuador, and they are taken into account for the calculation of inflation. In that basket are:
Cocina.
Oven.
Refrigerator.
Washing machine.
Dryer.
Air-conditioning.
Blender.
Fan.
Clothes iron.
More buyers are expected on holidays
The Law to Confront the Internal Armed Conflict of the Government of Daniel Noboa, approved on February 6, 2024, provides that VAT rises to 13%.
However, the law also establishes the possibility that the President of the Republic can increase it up to 15% through an executive decree.
The decree to raise the rate was published on March 15 and the VAT increase was confirmed for more than 200 products. Since that day, sellers of appliance chains located in the north of Quito perceive that they have received more customers.
A seller in this area explained, on March 27, 2024, that with the announcement of the VAT increase, the store has received about 12 people a day and, of them, seven end up buying.
Before, about five would come, but sometimes only to quote. Karina Mendoza, a salesperson at another chain, says that “the weekends in March have been the days when more people have come to quote and buy, they come as a family.”
She believes that during the Easter holiday, which begins on Friday, March 29, the influx will be even greater. According to Espinoza, white goods have been the most in demand in these days prior to the VAT increase.
“Many come to quote or buy kitchens and refrigerators, to get ahead with gifts for Mother’s Day.” Fernanda Espinoza
Sellers have also identified buyers who come to quote knowing that they will receive profits in April, so they could make an effort by paying cash in March until they receive this bonus.
Sellers have also identified buyers who come to quote knowing that they will receive profits in April, so they could make an effort by paying cash in March until they receive this bonus.