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Report: Government Not Suspending Reduction Grain Exports Taxes After All

By | [email protected] | May 28, 2018 11:21am

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It was a controversy that lasted three days.

On Friday, different online news sites such as La Nación and Infobae reported that the Casa Rosada was considering the suspension of the progressive reduction of taxes on soybean exports and reinstating them on wheat and corn as well. On Sunday, these same websites were already confirming it would not happen.

In the meantime, the main leaders in the agricultural sector went up in arms to prevent such rumor from becoming a reality. Agro-Industry Minister Luis Miguel Etchevehere, a prominent member of the sector before being tapped by the Executive, sided with them by saying it was “a ridiculous tax.” And the representatives requested an “urgent” meeting with President Mauricio Macri, which ended up not being necessary because, according to Infobae, when Etchevehere went to Macri to argue against this potential decision, the President told him he had never approved such a measure.

La Nación’s Joaquín Morales Solá further confirmed the news – or lack thereof – in an op-ed published on Sunday, saying that on Saturday, “during a lunch meeting with his ally Elisa Carrió,” Macri decided “not to touch the current policy on grain exports taxes.”

On the next day, Treasury Minister – and now “economic coordinator” – Nicolás Dujovne, who on Friday had fed into the rumors by not denying them, assured nothing would change. The government thus made sure it wouldn’t be turning a powerful ally into a powerful enemy.

The agricultural sector is a mayor player in the Argentine economic and political landscape, and has always sided with Macri due to two factors: their mutual aversion to the former President, Cristina Fernández de Kirchner, and Macri’s promises – and posterior actions – to reduce taxes on the sector.

In fact, it was was one of the first measures his administration implemented after taking office. The taxes on wheat and corn have been eliminated, while those on soy were initially reduced to 30 percent and, since January this year, are being reduced by 0.5 percent each month. Currently they are at 27.5 percent. And it seems like, given the current state of affairs, they will continue to be progressively reduced month by month.