- Government can’t afford to reduce tax as promised, person says
- ‘Beyond electoral promises, the reality limits us:’ minister
The government in Argentina, the world’s third-largest soybean producer, is said to favor maintaining a 30 percent export tax of the oilseed, according to two people familiar with the matter.
The government can’t afford to reduce the tax by 5 percent as promised, according to one of the people. The government would receive an extra 20 billion pesos ($1.3 billion) if the tax isn’t cut. The people asked not to be named because a decision hasn’t been made.
Agriculture Minister Ricardo Buryaile said in an interview on Tuesday that the country is studying the pace of the soy-tax reduction. “What people need to understand is that beyond electoral promises, the reality limits us,” he said from the sidelines of an investment conference in Buenos Aires.
Argentina’s President Mauricio Macri in his first month in office upheld a campaign pledge by eliminating export taxes on farm products including beef, wheat and corn, while trimming the soybean tariff by 5 percentage points to 30 percent. Agriculture Secretary Ricardo Negri in April said the soybean tax would be cut gradually.
“The economic situation will keep Argentina from changing the 30 percent tax rate,” Roy Huckabay at Linn & Associates in Chicago, said in a telephone interview. “No change in tax structure will push farmers to plant more corn and less soybeans.”
Argentina is the largest exporter of soybean meal and oil and is the world’s third-largest grower of the oilseed, behind U.S. and Brazil, U.S. Department of Agriculture data show.