A controversial bill imposing a 10% tax on grains and oil seeds exported in their natural state was finally approved by the Paraguayan congress. The bill presented in 2012 was passed in the Senate, rejected in the Lower House and again ratified by the Upper House, however Deputies could not round up the necessary 53 votes to again reject it.
The bill applies to the export of soybeans, wheat, corn and sunflower, Paraguay’s main agriculture produce, in their natural state. The country is among the world’s top exporters of soybeans behind Brazil, the US, and Argentina.
All Lower House members from the ruling Colorado party and a few allies voted to reject the bill but only managed 46 votes.
Opposition lawmakers said that Paraguay needs to collect more taxes to address the social needs of the majority of the population. However government sources have indicated that President Horacio Cartes will veto the law.
Farmers’ reaction was immediate. Paraguay’s Agriculture Coordinator, CAP, warned that the approval of a bill taxing exports of grains and soybeans in their natural state can only be interpreted as a “war declaration on the country’s farming sector”
CAP president agronomist Hector Cristaldo said that the tax means “farmers will be paying three times on the same production item and will not benefit the Paraguayan state but a few multinational industries that export grains in their natural state”.
Cristaldo added that the export tax bill would mean the end of wheat and corn in Paraguay “since these two cereals are planted as complementary and alternative to soybeans and thus will not be profitable to export them”.