News / Americas

Uruguay to Sell Marijuana Tax-free, Undercutting Drug Traffickers

People look at marijuana smoking paraphernalia in a street market in downtown Montevideo, March 10, 2014.
People look at marijuana smoking paraphernalia in a street market in downtown Montevideo, March 10, 2014.
Reuters
— Uruguay will exempt marijuana production and sales from taxes in a bid to ensure prices remain low enough to undercut competition from black market pot smuggled in from Paraguay, according to consultants advising the government on a legalization plan.
 
Congress approved a law allowing the cultivation and sale of marijuana in December, making Uruguay the first country to do so, with the aim of wresting the business from criminals.
 
“The principal objective is not tax collection. Everything has to be geared toward undercutting the black market,” said Felix Abadi, a contractor who is developing Uruguay's marijuana tax structure. “So we have to make sure the price is low.”
 
Uruguay will auction up to six licenses to produce cannabis legally in the next weeks. The government is also considering growing marijuana on a plot of land controlled by the military to avoid illegal trafficking of the crop.
 
While cigarettes and alcoholic drinks are taxed heavily in Uruguay, the official marijuana trade will operate virtually tax-free, Abadi said. Uruguay does not require a decree or law to exempt a product from taxes.
 
President Jose Mujica signed a decree outlining the fine print of the new policy this month. It said Uruguayans will be able to buy up to 10 grams of marijuana a week in pharmacies at between 85 cents and US$1 dollar a gram, a price comparable to black-market pot.
 
An agricultural country of 3.3 million people, Uruguay has come under the spotlight for the marijuana law championed by Mujica, a 78-year-old former Marxist guerrilla whose modest lifestyle and philosophical musings have made him a media  darling abroad.
 
Uruguay has gone further than other countries such as Argentina and Spain, which have decriminalized possession, or, like the Netherlands, which tolerates the sale of marijuana. The U.S. states of Washington and Colorado have legalized the sale of cannabis under license, but federal laws still prohibit sales.
 
Colorado imposed heavy taxes on marijuana sales.
 
Uruguay's experiment is being keenly watched by Latin American peers at a time when the U.S.-led war on drugs faces mounting criticism. Success in Uruguay could fuel momentum for legalization elsewhere.
 
While relatively prosperous Uruguay has low crime rates, one-third of prisoners are behind bars on drug charges.

You May Like

At International AIDS Conference One Goal, Many Paths

The 12,000 delegates attending 20th International AIDS Conference in Melbourne have vastly different visions about how to eradicate disease More

Disasters May Doom Malaysia’s Flag Carrier

Even before loss of two jets loaded with passengers on international flights, company had been operating in red for three years, accumulating deficit of $1.3 billion More

Afghan Presidential Vote Audit Continues Despite Glitches

Process has been marred by walkouts by representatives of two competing candidates, Abdullah Abdullah and Ashraf Ghani More

This forum has been closed.
Comment Sorting
Comments
     
by: Laobai from: China PR
May 19, 2014 8:55 PM
So wise. The only way to beat the cartel and black market is to legalize and deregulate. That just shows that Paraguay wants equity for all not just profits for the government. That's why the US won't really legalize it because they know they can't make money from it if they do.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Nature of Space Exploration Enters New Agei
X
Elizabeth Lee
July 20, 2014 2:36 AM
Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.
Video

Video Nature of Space Exploration Enters New Age

Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.
Video

Video Chicago’s Argonne Lab Developing Battery of the Future

In 2012, the U.S. Department of Energy’s Office of Science awarded a $120 million grant to a new technology center focused on battery development - headquartered at Argonne National Laboratory in suburban Chicago, Illinois. As VOA’s Kane Farabaugh reports, there scientists are making the next technological breakthroughs in energy storage.
Video

Video In NW Pakistan, Army Offensive Causes Massive Number of Displaced

Pakistan’s army offensive in North Waziristan has resulted in the large-scale displacement of the local population. VOA's Ayaz Gul reports from northwest Pakistan where authorities say around 80 percent of the estimated 1 million internally displaced persons [IDPs] have settled in Bannu district, while much of the remaining 20 percent are scattered in nearby cities.
Video

Video Kurdish Peshmerga Force Secures Kirkuk, Its Oil

The Kurdistan regional government has sent its Peshmerga troops into the adjacent province of Kirkuk to drive out insurgents, and to secure the area's rich oil fields. By doing this, the regional government has added a fourth province to the three it officially controls. The oil also provides revenue that could make an independent Kurdistan economically strong. VOA’s Jeffrey Young went out with the Peshmerga and filed this report.
Video

Video Malaysia Reeling: Second Air Disaster in Four Months

Malaysia is reeling from the second air disaster in four months involving the country’s flag carrier. Flight 340 vanished in March and despite an extensive search, no debris has been found. And on Thursday, Flight 17, likely hit by a surface-to-air missile, came apart over eastern Ukraine. The two incidents together have left more than 500 people dead. VOA Correspondent Steve Herman reports from Kuala Lumpur.
Video

Video Diplomatic Crisis Grows Over MH17 Plane Crash

The Malaysia Airlines crash in eastern Ukraine is drawing reaction from leaders around the world. With suspicions growing that a surface-to-air missile shot down the aircraft, there are increasing tensions in the international community over who is to blame. Henry Ridgwell reports for VOA from London.
Video

Video Undocumented Immigrants Face Perilous Journey to US, No Guarantees

Every day, hundreds of undocumented immigrants from Central America attempt the arduous journey through Mexico and turn themselves over to U.S. border patrol -- with the hope that they will not be turned away. But the dangers they face along the way are many, and as Ramon Taylor reports from the Rio Grande Valley in Texas, their fate rests on more than just the reception they get at the US border.
Video

Video Scientists Create Blackest Material Ever

Of all the black things in the universe only the infamous "black holes" are so black that not even a tiny amount of light can bounce back. But scientists have managed to create material almost as black, and it has enormous potential use. VOA’s George Putic has more.
Video

Video Fog Collector Transforming Maasai Water Harvesting in Kenya

The Maasai people of Kenya are known for their cattle-herding, nomadic lifestyle. But it's an existence that depends on access to adequate water for their herds and flocks. Lenny Ruvaga reports for VOA, on a "fog collector."

AppleAndroid

More Americas News

Texas Gov. Perry Orders State National Guard to Border

Governor says he took extraordinary measure to help secure the border, his critics say it is a political stunt
More

Cuba Hopes for More Investment as Chinese President Arrives

Chinese President Xi Jinping begins a two-day visit to Cuba on Monday evening
More

Video Addicts’ Safe Haven in Vancouver Helps Control HIV

Supervised-injection facility lowers spread of infection locally, studies show, but has critics
More

Video Shunned by Family, Haitian Orphan Finds Supportive Home

'We deal with [HIV] stigma by ... making life as normal for kids as possible'
More

Spanish Police Arrest Suspected Colombian Crime Lord

40-year-old identified as key member of violent Colombian drug cartel, one of Colombia's most wanted criminals
More

China Provides $4B to Venezuela in Exchange for Oil

Deal inked during a 24-hour visit to Venezuela by Chinese President Xi Jinping, who is on a tour of Latin America
More