Issue
FHC worked with clients in the food and beverage industry to mitigate the impact of a bill proposed in 2020 to amend Law 28-01 and extend tax benefits to companies that had established their business operations in specific border provinces, resulting in unfair competition within the food and beverage sector. As originally drafted, this law was intended to promote economic development for the border province regions but had the unintended consequence of generating unfair competition by allowing food and beverage companies availing themselves to Law 28-01’s tax benefits to sell their products throughout the country unrestricted.
Our Role
FHC developed a strategy consisting of direct interventions with the Ministers of Industry and Commerce and of Finance, as well as with the House of Representatives Speaker to find solutions that could ameliorate the competitive imbalance in the sector. FHC was key in forming a coalition consisting of several relevant industry players, together with international organizations and the US Embassy, which collaborated to mitigate resistance from border zone
Results
The amendment was approved, modifying provisions that generated unfair competition and unfairly harmed companies established outside of the border development zone. Reputational risk to the coalition members was mitigated due to the collaborative dynamics exercised.