Paraguayan Farmers Protesting New Export Tax

June 22, 2017 Taxation in Paraguay

export tax on soyASUNCION – Farmers in Paraguay are fearing that a new tax could spell the end of corn and wheat exports in the country, while also crippling the vital soy production sector.

Farmers in Paraguay gathered on June 21st to protest a proposed tax measure which, they claim, could shrink the level of exports of agricultural products from the country.

The new tax would be levied at a rate of 15 percent on the export of soy, corn, and wheat products leaving the country.

It is expected that the government could vote on the tax this week, as early as June 22nd.

Supporters of the tax claim that the agricultural sector enjoys an overly beneficial tax environment, and could pay more in order to raise revenue and help fund development projects.

It is estimated that the agricultural industry saw exports of approximately USD 3 billion last year.

Farmers and special interest groups who oppose the tax claimed that the measure would almost halt the production and export of wheat and corn, and would significantly reduce the levels of export of soy.

Paraguay is currently the fourth biggest exporter of soy products in the world.

The low tax environment enjoyed by the agricultural industry was originally established as a means of attracting more foreign investors to the country.