Uruguay Allocates Dairy Export Tax to Strengthen Inale's Financial Autonomy

The Uruguayan government has announced a new financial strategy for the National Institute of Milk (Inale) that will be implemented from January 1, 2027. According to the government's budget review, 50% of the current 2 per thousand export tax on dairy products will be redirected to Inale. This move is intended to boost the institute's financial autonomy and lessen its dependency on the National Budget, without introducing new taxes or increasing the current tax burden on the dairy sector.

Previously, the entire tax revenue was allocated to the Laboratorio Tecnológico del Uruguay (LATU), which used these funds to provide bonuses to the dairy sector. Under the new arrangement, LATU will retain 50% of the tax revenue, while the other half will be directed to Inale. Historically, this tax has generated approximately US$ 1.7 million annually over the past five years, meaning Inale is expected to receive around US$ 850,000 per year.

This financial adjustment aims to address one of Inale's key challenges: its financial limitations. The institute requires about US$ 1.4 million annually to maintain its technical and administrative operations. However, the allocation from General Revenues has remained around 35 million Uruguayan pesos, or approximately US$ 850,000, forcing Inale to seek additional budgetary support to meet its operational costs. With the new funding source, Inale will nearly double its available resources for its activities.

This change responds to longstanding requests from dairy industry associations, who have advocated for a portion of the revenue generated by export activities to directly support the institution responsible for the sector's development. The government also believes that this measure will align Inale's funding model with that of other agricultural institutes, which have their own income streams linked to the economic performance of the activities they represent.