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Argentina's Rural Society Sees No End In Sight For
calendar09-07-2004 | linkDow Jones | Share This Post:

Buenos Aires, July 7 (OsterDowJones) - Argentina's government has no plansto reduce or eliminate taxes on grain and oilseed exports any time soon,the president of Argentina's biggest agricultural group said Wednesday.Argentina's Economy Ministry collects a 20% tax on corn and wheat and a23.5% tax on soybeans when these goods are shipped abroad. The taxes addan estimated six billion pesos ($1=ARS2.95) to federal coffers each year,the Argentine Rural Society says. But they cost producers as much as $660million annually in lost revenue, according to private-sector estimates."In recent meetings we've had with (Economy Minister Roberto) Lavagna, hehas disabused us of expectations that the taxes would be reduced anytimesoon," Luciano Miguens, president of the Argentine Rural Society, saidWednesday. "He has made it clear that this is not a priority." FormerPresident Eduardo Duhalde enacted the taxes in 2002 to help the governmentbalance its accounts and pay for unemployment programs amid a brutaleconomic crisis. That crisis was brought about in part by the government'sdecision to devalue its currency, which hurled the economy into a state ofconfusion and pummeled the country's banking sector. But the devaluationhas been beneficial to the agriculture sector, whose products have becomemore competitive in the global commodities market. Record soybean pricesthis year have provided a windfall for soybean farmers and farm propertyvalues have skyrocketed to all-time highs. Because of this, Argentina'sagriculture sector has an obligation to contribute more than others toboost tax revenue, Lavagna and others have reasoned in the past.