Argentina raises export taxes to finance spending


German News Agency

Sunday 12/15/2019 01:19 AM Abu Dhabi time

Reuters new president Alberto Fernandez - Reuters

Reuters new president Alberto Fernandez – Reuters

Argentina, the world’s largest source of processed soybean and soybean meals, raised export taxes on Saturday, as the government seeks to finance spending under the new president Alberto Fernandez.

The move was widely circulated by farmers, and farmers’ crops account for a third of the country’s total exports.

The tax will now be fixed at 9%, rising from 4 pesos to the dollar on initial exports with little added value.

The government of new Argentine President Alberto Fernandez has said that she has started discussions with the International Monetary Fund on the country’s external debt that Buenos Aires has been unable to pay.

The current exchange rate is 7% lower than the prevailing price, while an additional fee of 18% has been imposed on exports of soybeans and processed soy products, Bloomberg News reported.

The government said the move was urgent to meet its financial needs, according to a decree published in the Official Gazette. Fernandez took over on December 10.

The president of the Rural Areas Association of Argentina, Daniel Pellegrina, said that the new taxes “will have a very big impact on the producers,” according to the newspaper “La Nacion,” adding that the new government has never notified farmers of this increase.

Argentina faces a financial blow amid a severe drought in the Pampas agricultural belt, which led to a halt in agriculture.

Fernandez takes office in the midst of an acute economic crisis, tough talks with creditors and unprecedented credit facilities from the International Monetary Fund, worth $ 56 billion.

The President stated that the nation will not be able to meet its debt obligations if the economy does not achieve growth.

Fernandez, who took office on December 10, had promised voters that he would revive the economy from its slowdown, and he now aims to make the central bank the cornerstone of this strategy, by exploiting the fact that the bank is not legally independent of the government.

Projections indicate that the deficit will reach 1.8% of GDP this year, after reaching more than 6% in the third quarter of 2018.

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