December 28, 2007

Argentine house approves retroactive grain export tax
 

Argentina's House of Representatives voted unanimously late Wednesday (December 26, 2007) to invalidate grain export declarations made prior to a recent increase in the export tax if the exporters can't show they had already purchased the goods for shipment. The bill is likely to be signed into law following Senate passage on Dec. 19.

The legislation is designed to counter last month's moves by exporters to declare large amounts of export commitments amid speculation the government was poised to raise the export tax on soy products and other grains. The law aims to prevent exporters from avoiding higher export taxes that are in place when they actually ship the goods. The retroactive nature of the bill will mean an extra US$400 million in taxes for grain exporters this season, according to local press reports.

Exporters must make a sworn declaration to the government of an export sale before shipping the goods. A reference price for tax purposes and the applicable tax rate are locked in once the company declares a shipment.

On Nov. 7, the government raised the export tax on soy to 35 percent from 27.5 percent, and the tax on soyoil to 32 percent from 24 percent. Wheat export taxes were raised to 28 percent from 20 percent, while the tax on corn rose to 25 percent from 20 percent.

Prior to the tax increases, exporters had declared 2007-08 soy export commitments of 8.6 million  tonnes, up from 2.3 million tonnes of new crop export declarations at the same time last year.

New-crop soymeal export commitments totaled 8.2 million tonnes, up from 1.7 million tonnes a year ago, while 2007-08 soyoil export declarations reached 2 million tonnes, up from 777,462 tonnes.