Agro Perspectiva

Argentina: New Export Tax Rates in Argentina

10.03.2020 16:25 "Agro Perspectiva" (Kyiv) — Following are selected highlights from a report issued by a U. S. Department of Agriculture attache in Buenos Aires (Argentina), on Wednesday, March 4, 2020 the Government of Argentina announced adjustments to its export tax regime. Key modifications to existing rates included an increase from 30 percent to 33 percent for soybeans and soybean products. Wheat, corn, and sorghum export taxes remain at 12 percent. Other commodities saw reduction or maintenance of their current export tax rates.

Fernandez Government Seeks to Raise Revenue by Taxing Agricultural Exports: In December 2019, shortly after taking office, Argentine President Alberto Fernandez raised export taxes on grains and oilseeds under pre-existing legal authority. Shortly thereafter, Pres. Fernandez gained the authority to further increase export taxes as part of an emergency economic law, the «Social Solidarity and Production Reactivation» act. The Fernandez government is seeking additional revenue to finance new stimulus measures for social expenditures as well as manage existing fiscal deficit and service outstanding debt obligations. On March 4th, 2020 the Government of Argentina exercised its newly granted powers by announcing further adjustments to its export tax regime through Decree 230/2020, which included increasing the export tax on soybeans and soybean products to 33%. Value-added products and labor-intensive industries generally saw reductions or maintenance of current rates. The adjustments reflect not only a method to increase revenue overall but also an emphasis on taxing larger, commercial farm that produce the majority of Argentina’s grains and oilseeds while reducing the burden for smaller-scale farmers and farmers that produce specialty crops (referred to as regional economies in Argentina). Luis Basterra, Minister of Agriculture, Livestock, and Fisheries said, «We are applying the concept of social equality, that is to say, that export taxes are rising for those with greater ability to pay, and there will be a benefit for less well-off producers, who the prior government’s policies never served.» National agricultural organizations as well as grassroots and local farm leaders had strongly resisted the rise in export taxes. By «segmenting» the export taxes in this manner, the government may be seeking to prevent unified farm resistance by dividing agricultural interest groups based upon commodity and farm size. For soybean and soy products, Argentina’s largest export category, exporters have paid a 30% export tax since December 2019, however, exporters now must pay a 33% export tax on soybean, soybean oil, and soil meal. Sources indicate that some relief may be forthcoming, though, for smaller-scale producers. Information issued by the Ministry of Agriculture indicate exporters selling soybean and soybean products sourced from farmers producing smaller volumes could pay anywhere from 30–20% in export taxes depending upon the size of the farm from which the soybean were sourced. Soy and soy products sourced from farmers producing more than 1000 T (36,743 bushels) of soybeans per year will continue to pay 33%.