Argentina likely to increase export duties if devaluation sharpens: economist

Argentina's government is likely to increase fixed export duties this year if the local currency experiences a sharp devaluation against the US dollar, Marina Dal Poggetto, head of local economic consultancy firm Estudio EcoGo, told Agricensus.

 “The possibility for the government to raise fixed export duties of three and four pesos will depend on the evolution of the foreign exchange market, which will also depend on the electoral scenario,” Dal Poggetto said.

In September last year, Economy Minister Nicolas Dujovne announced that the duties on soybean exports would be immediately cut to 18% from 25.5%, while soyoil and soymeal duties were cut to the same level from 23%.

However, simultaneously the country reintroduced a retention tax on all primary exports of 4 pesos for every US dollar of goods exported, which would be valid until the end of next year.

Any rise in duties will likely anger farmers, who have been reluctant sellers of the crop so far due to relatively low global prices.

Farmers were enthusiastic supporters at the outset of the current government following its promise to lower export taxes.

The government had undertaken to lower duties at the end of 2020, but Luciano Cohan, partner at economic research firm Elypsis, said that the national government would probably not be in a position to do so.

“For 2020, and regardless of who wins the presidential elections, I find it hard to believe that the fiscal situation will allow the government to implement reduction in the tax burden on exports,” Cohan said.

The national government is trying to slash the country's budget deficit as part of its 2018 loan agreement with the International Monetary Fund.