Argentina auto exporters will receive 6.5% tax rebate for Mercosur exports

Argentina’s government has increased tax rebates from 2% to 6.5% for vehicle exports to Mercosur countries in a bid to revive the country’s declining car industry, according to the country’s Labor and Production Ministry.

The news should help stimulate auto exports which, according to the Association of Automotive Makers (ADEFA) data, have dropped 11.4% so far this year. Adefa data also shows Argentina’s car production plummeted by 30% to 107,000 units between January and April, compared to the same period in 2018.

Auto exports outside the Mercosur trade bloc already receive the 6.5% rebate, however, Brazil is the largest buyer of Argentine-made cars. Of the total number of vehicles produced in the country, 60% of them are exported, with most of the production going to Mercosur, according to the Ministry of Labor and Production.

According to Reuters, Argentine Minister of Labor and Production Dante Sica said the move should help “exports recover their dynamism and rev up an increase in the production of units planned for 2019”.

The new increased tax rebate will come into effect from May 9.

The following graph shows Argentina’s production, exports and domestic sales based on Adefa data.

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