(Photo: President Fernandez congrats the Minister of Economy, Martín Guzman)
Buenos Aires, January 6, 2020. The avalanche of agricultural products export registration during November and December, previous to the change in the Government administration derived into an unusual phenomenon: the export tax collection rocketed to US$1,054 million in December, the largest collection since July 2015, during the Kirchnerism administration.
Farmers accelerated their grain sales after the primaries when the Peronist party defeat the neo-liberal coalition Cambiemos. They rightly interpreted that export taxes could be raised if the opposition won in the general election, October 27. The export registration hit peaks during October, November and the first week of December. Just three days after new President Alberto Fernandez took office, December 10, he updated the export taxes to 30% for the soybean complex and 12% for most of the grains.
Usually, the export tax collection reaches a peak when soybean and corn are being harvested, i.e., during April and May. During May 2019, export tax collection ascended to US$856 million. But even during November, this amount climbed to US$900, 123% up YoY. The December collection represented a 152% annual increase.
Furthermore, even while the export taxes represented an average of 7.9% of the total fiscal resources during 2019, in November its participation climbed to 11% and to 13% during December. Value Added Tax (IVA) is the largest contributor to the fiscal coffers, with more than 30% of the total resources.
This is good news for the Fernandez administration because they start ruling the country with more resources in the box, but during the coming months, and until the entering of the soybean and corn harvest, it is highly probable that export tax collection drops abruptly.