Many of these charges have been reduced since 1994. The CET, in turn, is being reduced on a phased basis to reach 5 to 20 percent by 1998. An increasing variety of raw materials and machinery in approved sectors is exempt from all customs duties. Duties on manufacturing inputs were reduced across the board to 2.5 percent from 5 percent and eliminated in several categories. The surcharges will be progressively phased out by 1999.
Excise tax is levied only on petroleum products, tobacco and alcoholic beverages.
The corporate tax rate was lowered in 1994 from a maximum of 45 percent to 38 percent, and again in 1995 to 35 percent. All imports of food and drugs must satisfy prescribed standards. Imports of meat, live animals and plants, many of which come from the United States, are subject to specific regulations. The import of firearms, ammunition and narcotics are rigidly controlled or prohibited. The debt to GDP ratio fell to 35 percent in 1995 and to an estimated 31 percent in 1996, while debt service as a percent of exports fell from 21.5 percent in 1995 to 18.5 percent in 1996.