Argentina hikes export taxes in attempts to finance new government’s spending

Argentina hikes export taxes in attempts to finance new government’s spending

Argentina raised export taxes over processed soybean meal and oil on Saturday as its government attempted to fund spending under new President Alberto Fernandez.

After this year’s 37% slump in the Peso, his administration has replaced a levy of 4 Pesos per Dollar for most of its exports with a fixed charge, according to a decree in the official gazette.

However, the documents did not specify soybeans in its list of products which lead Eugenio Izrazuegui, head of research a grains brokerage Enrique Zeni to interpret that the oilseed along with grains like corn and wheat would revert back to its rate of 12%. This is due to soybeans and other processed soy products already have an additional 18% charge which would make shipments taxed to a total of 30%.

Crop crushing and export group Ciara-Cec confirmed in a phone message on Sunday that soy will be charged 30% with corn and wheat at 12%.  

On Sunday, Fernandez told Radio Mitre that farmers shouldn’t be rattled by the hikes, explaining that he was simply getting rates closer to where they were a year ago, when the system of 4 pesos per dollar was brought in. The currency devaluation since then had diluted the tax.

The move had been widely telegraphed by growers, whose crops are worth a third of all the nation’s export dollars. The head of the Argentine Rural Society, Daniel Pelegrina, said in a radio interview the new taxes “will have a very big impact on farmers.”