MercoPress. South Atlantic News Agency

Farm taxes drop 30%

Uruguayan farmers and government agree that farm taxing overall has dropped 30% during the last two years, mainly through the elimination of land levies and considerable reduction in social security contributions. However farmers and government technical offices disagree as to how much amounts the current fiscal pressure, (relation between taxes and GDP) for the Camp, and what was effectively paid. Uruguayan government officials argue that fiscal pressure dropped from 9,5% in '99 to 7,8% in 2000,(agriculture GDP was estimated in 1,17 billion US dollars in '99 and 1,14 billion in 2000); farmers insist that the correct numbers are 12,9% and 12%. Besides taxes effectively paid by Camp total 110 million US dollars for the government, but 135 million US dollars for farmers. Apparently the difference stems from the way indirect incentives and tax returns to agriculture exports filter back to farmers. Government officials estimate 50% of the volume involved finds it way back to farmers pockets, either directly o indirectly through better prices. Farmers point out that besides rice, where reimbursements per bag are handed out directly to farmers, the rest simply is absorbed by the industrial process. Furthermore farmers point out that last year, given the government's revenue crisis, fuel taxes (government monopoly) jumped 20% with a direct impact on farming and transport. However farmers and government agree that the Uruguayan taxing policy has changed substantially during the last decade, rapidly turning from direct to indirect tax collecting. Consumers now carry the heaviest burden, mainly VAT which is 23% in Uruguay, while industry and camp overall have seen considerable reductions. A report from the Uruguayan Industries Chamber indicates that overall fiscal pressure amounts to 35%, while for industry in 1998 it averaged 7,8% and for Camp now ranges between 8 and 12%.