Argentina raises export tax on soybean bran and oil

The Argentina government announced, on the 19th, an increase from 31% to 33% in the soybean bran and oil export tariffs. The government also announced the creation of a Wheat Stabilization Fund to control domestic prices after President Alberto Fernández declared a “war on inflation.”

Through two decrees published in the country’s Official Gazette, the government made the measures official and suspended, until December 31, a 2020 decree that reduced export taxes on both products. Thus, soybean bran and oil export tariffs went from 31% to 33%.

Argentina is the world’s leading exporter of soybean bran and oil. A two-point increase in the tax would imply an additional collection of US$425 million to Argentina, according to the Buenos Aires Grain Exchange (BdeC).

In a different decree, the government created a fund “to stabilize the cost the tonnes of wheat purchased by Argentine mills.”

The government stated that, among other reasons for taking such measures, the Russian invasion of Ukraine has significantly affected the global supply of agricultural products.

“The new current situation at the international level prompts us to take urgent measures to stabilize internal prices of products that are essential for the Argentine people, as well as maintaining an adequate volume for the internal market,” indicated the decree.

Oilseeds industry chamber CIARA said it was looking into potentially filing a legal action against the tax increase.

This measure “clearly punishes Argentina’s industrialization,” Gustavo Idrogras, head of the grain export chamber CIARA-CEC, told Reuters. “This will severely affect the entire soybean chain.”

Agribusiness has a tense relationship with Fernández and previous Peronist party governments because they tend to intervene in the market.

“This creates a climate of uncertainty and a lack of trust… I think it’s heading towards a national protest,” said Jorge Chemes, head of the Argentine rural confederation CRA.

Export taxes are an important part of Argentina’s overall tax revenue. Exports of wheat and corn, two other pillars of local agribusiness, are taxed at 12%.

Source: Isto É Dinheiro

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https://www.istoedinheiro.com.br/argentina-sobe-imposto-de/

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