Of every ten pesos of tax revenue collected by the Argentine Treasury, 4.4 pesos originate in the country's agro-business. Fiscal pressure on Argentina's primary production, (cereals, oil seed, meats) plus the industrialization process is in the range of 32%, ten points higher than for the rest of the economy, reports Buenos Aires daily La Nacion.
The main "contribution" comes from export duties, which for this year's cereal and oil seed crop is expected to surpass seven billion US dollars. In the current Argentine economic model agriculture and agro-business is estimated represents 36% of all jobs, 45% of aggregate production and 56% of exports. The windfall earnings generated by the current global boom in commodity prices (three and fourfold for grains and oil seeds since 2003) have helped Argentina, (and the Kirchner' administrations) recover from the 2001/02 economic collapse when GDP contracted 15% and the country defaulted on its sovereign debt. Since then the 250.000 Argentine farmers, who own some of the most fertile flatlands of the globe have been exposed to the tax man, and a myriad of levies, from the federal, provincial and municipal governments, avid to restore their payrolls and a system of compensations that enables food prices (grains, oil seeds, meats, dairy produce for domestic consumption) to remain stable. The long list of fiscal imagination not only includes the check tax on every bank transaction debit and credit, but in the case of land contribution is three fold: at federal level the individual owner, corporation or shareholder is taxed and must pay on an estimated minimum earnings; at provincial level the traditional land duties and finally the municipalities collect such levies as the camp road system (whether it exists or is maintained or not) and other special contributions. Furthermore camp and agro-business sell their primary produce with a 10.5% VAT, but for most inputs must pay 21%VAT. and there's no mechanism to compensate the negative difference for farmers. And what about fiscal evasion or elusion?, increasingly up-road and with no need of government satellite tracking or information crossing: export duties set the level of prices even for domestic consumption. And if prices climb above certain levels that could have an impact on inflation, the Argentine government arbitrarily freezes the export registry for weeks or months. The small farmer as usual has the least opportunity to pay fewer taxes. At the most he can contract someone to look after the books but the large grain planting pools organized in corporations possibly operating with 200.000 hectares have access to the best possible legal and fiscal advice, said Juan Manuel Alvarez Echague, a tax expert from the Argentine Agrarian Federation.
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