March 22, 2022

Argentina raises export tax on soy oil and soymeal to 33%

Argentina has increased the export tax on soy oil and soymeal to 33%, two percentage points higher until end-2022 to combat domestic inflation, Reuters reported.

Argentina is the biggest exporter of processed soy oil and soymeal. The country's inflation is running at above 50% per year.

The new announcement is a reversal of the tax reduction announced in late-2020, which means processed soy products will be taxed at the same rate as raw soybeans.

Argentinian President Alberto Fernandez said the changes were needed because markets for agricultural supplies were upended due to Russia's invasion into Ukraine.

The country's oilseed industry chamber CIARA said it is analysing possible legal challenges to the tax hike.

Gustavo Idrogras, head of the CIARA-CEC grains exporting chamber, said the measure punishes Argentina's industrialisation and severely affects all of the soy chain.

Jorge Chemes, head of the Argentine rural confederation CRA said the move could result in a nationwide protest.

Argentina's overall tax revenue is dependent on its export taxes. Wheat and corn exports from Argentina are taxed at 12%.

-      Reuters