(Photo: Despite the European pressure, President Macri is not willing to resign to the fiscal contribution of the soybean complex)
Buenos Aires, July 5th. This week we wrote about the preliminary agreement reachead between the European Union and the Mercosur, and we said that one of the points agreed was the elimination to the export duties by the Mercosur countries, with special emphasis on the soybean complex.
Argentina is imposing 18% export tax over the FOB prices of the soybean complex (bean, meal and oil) plus AR$4 per dollar, all that reachs a 28% rate.
This is the tax scheme given by Order 793, in force from September 2018 to December 2020. But what will happen after the deadline? Some people expects that soybean export taxes will drop to zero, citing the commitment with the FTA with EU. But reliable sources of eFarmNewsAr told that since January 1st 2021, export taxes for the soybean complex will return to the previous 18 percent. Only the AR$4 per dollar will be eliminated since that date.
Citing official sources, the own ones add that Government (if it is reelected) is not thinking into eliminate the export taxes even when the FTA come into force. They say that Government will maintain a 14% duty over the soybean complex.
But, is not this contradictory with the FTA spirit? Our sources explained that Government tried to negotiate the elimination of the export taxes versus the elimination of agriculture subsidies by the EU. If they don’t eliminate subsidies, neither Argentina will with export taxes.
Also the OECD have recommended to cut the export taxes, in its Argentinian agriculture sector analysis, saying that is the one of the few countries with a “negative” support for the farming sector.
But with a 55/57 MMT of output, soybean complex is the largest currency generator for the country, around US$20 billion or one third of the total exports. The current 28% export tax implies a fiscal collect around 5.6 billion dollars. In fact, when in December 2015 the Cambiemos alliance arrived to the government, they eliminated export taxes for all products except for the soybean that remained at 30% of the FOB price. The fiscal question is the reason to maintain the taxes, yesterday, today and tomorrow.