Argentina, a major agricultural exporter, has announced a temporary reduction in export taxes on grains, a move aimed at alleviating the financial pressures faced by farmers due to drought and low crop prices. This decision fulfills a campaign promise made by libertarian President Javier Milei.
Key Highlights:
Tax Reductions:
The government will lower taxes on soybeans and related products starting Monday and continuing through June.
Specific reductions include:
Soy export taxes: Decreased from 33% to 26%.
Soy derivatives: Reduced from 31% to 24.5%.
Wheat and corn: Cut from 12% to 9.5%.
Economic Context:
Economy Minister Luis Caputo emphasized the government’s commitment to lowering taxes, stating, “This is a government that has come to lower taxes.”
The agricultural sector has been under pressure due to a severe drought and declining crop prices, leading to calls for tax relief.
Support from the Farming Sector:
Farmers welcomed the announcement, with Miguel Simioni, head of the Rosario grains exchange, describing it as a “step in the right direction.”
The government also plans to eliminate export taxes on regional economies permanently.
Economic Recovery:
Argentina’s economic activity reportedly grew in November for the first time since mid-2024, indicating a potential “V-shaped recovery.”
Analysts from J.P. Morgan noted that continued growth into December could result in a 3.3% increase in economic activity for President Milei’s first year in office, alongside decreases in inflation and poverty.