A work carried out by the Agricultural Foundation for the Development of Argentina, at the request of the Association of the Soy Chain (ACSOJA), reflected the high tax pressure that affects the soybean complex, with a strong impact of withholdings. The data collected corresponds to the month of June 2019.
According to the report, presented by economists, David Miazzo and Nicolle Pisani Claro, the tax burden in the three links amounted to USD 150.21 per ton of soybean, where the withholdings explained 66%, while the other 34% is distributed among the rest of the taxes: 21% earnings, 3% ICDB, 3% contributions and ART, 3% provincial rural real estate, 2% stamp tax, 1% gross income and 1% municipal taxes. Analyzed by tax destination, 93% corresponds to the National State, followed by the Provincial level (6%) and finally the Municipal level (1%).
In addition, expressed in relative values, the collection of USD 150.21 per ton in June 2019 represented 67.89% of the gross margin of the chain.
And with the current composition of 33% withholdings, keeping all other values constant, the tax burden per ton amounts to USD 165.49, which is equivalent to 45% of the market value of the product and representing 74.19% measured on gross margin.
David Miazzo, chief economist at FADA, commented during his presentation: “The soy chain considers withholdings to be a distorting tax and that is why it is asking for their elimination. For this, a possible solution is proposed in terms of economic and fiscal impact, hand in hand with a path of low withholdings with the aim of sustaining part of the tax revenue, but at the same time generating positive expectations for the chain, on a growth in production and industrialization, with more labor and foreign exchange generation ”.
For his part, the president of the Soybean Chain, Luis Zubizarretahe commented: “The work that Fada prepared came up as an idea by Acsoja to attack the problem, where Argentine soybean production is stagnant and even in decline, and where the production potential could be much greater. The implicit definition is that the high tax burden on the sector is operating as an anchor. That slows her down. We are convinced that the exit from the crisis goes hand in hand with an increase in productivity ”.
Once the impact of taxes on the soy chain was presented, From Acsoja they submitted a proposal to increase productivity levels, without harming tax revenues. Zubizarreta said: “We have the key and the way out is very clear: reducing taxes to allow production to grow and the agricultural frontier to expand, it is the way for Argentina to get ahead. We know it as a sector and we are tired of repeating it. Now we have to see how to convince decision makers. It is not an easy task. “
The heart of Acsoja’s proposal is the recovery of the path of the drop in withholdings. The data provided by Fada, showed that if the current 33% withholdings were reduced to 20% in 2027, the production of the oilseed could increase to 68.5 million tons in the 2026/2027 agricultural season. But in addition, a greater harvest could mean an increase of 500 million dollars in tax collection, which is currently around 7,000 million dollars annually, 573,000 freight charges and an additional 4,500 million dollars as foreign currency income.
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