Argentina to Cut Export Tax on Agricultural Commodities
December 15, 2015 Taxation in Argentina
BUENOS AIRES – Argentinian farmers will soon breathe a sigh of relief, as the government aims to drop taxes on the export of agricultural commodities, though the move is raising fears that a flood of products on the market will push international prices even further.
On December 15th the newly elected President of Argentina Mauricio Macri announced that he has agreed to new tax measures aimed at easing the burdens faced by the national agriculture sector.
The President announced that the export taxes previously levied on wheat, corn, beef and sorghum will be eliminated entirely.
Currently exports on wheat and corn are set at rates as high as 23 percent.
In addition, the export tax on soybeans will be cut from a rate of 35 percent to 30 percent, with further cuts of 5 percent per year being likely.
It is believed that the high taxes are slowing down the export of agricultural commodities as currently farmers are opting to store their products instead of releasing them for export, as they await an improvement in commodity prices and the applicable exchange rate.
Internationally it has been speculated that the removal of the tax would result in further drops to commodity prices, which are already sitting at low positions.