Milei’s proposed export tax surge sparks discontent among Argentine producers

According to La Nacion, Argentine President Javier Milei has introduced 664 articles in a National Congress law that are expected to impact the way exports are done in the country by altering “retenciones” (withholding taxes).

The proposal outlines that all products not subject to taxes will face a 15% levy. Consequently, previously untaxed products will now be subject to taxes.

Milei’s recent decision to devalue the local currency (peso) has been viewed by analysts as a move to boost the country’s commodity exports, enhancing competitiveness against American products.

However, the 15% tax rate has stirred dissatisfaction among the country’s producers, who were anticipating, based on Milei’s campaign promises, a reduction or elimination of export taxes.

“The Argentine market expected a reduction or elimination of retenciones. Nevertheless, I believe that the fiscal crisis prevents this from being implemented immediately at the outset,” notes Leandro Gilio, a professor and researcher specializing in agribusiness at the Insper Global Agribusiness Center.

It’s worth noting that the country has already raised taxes from 31% to 33% for soybean meal and oil.

Criticism

The Argentine Agroindustrial Council (CAA) has expressed discontent with the proposed export tax increase, arguing that it goes against the government’s job creation, production, and trade goals.

“While the need to achieve fiscal balance is commonly accepted, this goal will not be achieved by raising taxes on regional agro-industrial economies and other export agro-industrial value chains, such as meat, fisheries, the soy and wheat industrial complex, among others,” stated the CAA in a release.

The proposal also includes changes to the electoral system by eliminating primary elections.

If the National Congress approves the project, changes to the withholding tax rates on agricultural products will take effect on January 1, 2024.

Source: Money Times

Click here to read the original piece: https://www.moneytimes.com.br/deu-para-tras-milei-sinaliza-com-novo-aumento-para-taxas-de-exportacoes-retenciones-argentina/

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