Argentine ag under threat from tax overdrive

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Argentine ag under threat from tax overdrive

Argentina's embattled farmers need to be on an equal tax footing with the rest of the economy to avoid an agricultural shutdown, claims a leading industry figure.

Agricultural consultant Arturo Navarro told that farmers' overheads for planting, maintaining and harvesting their crops left them with harldy any income.

"In order to understand the shutdown in the country one has to realize what the farmer receives out of each ARS100 (US$22) of income. At best they are left with 20% after crop planting, tending and harvesting expenses; 80% of the remaining amount meets the tax burden of national, provincial and municipal authorities."

He described the taxes as effective "confiscation of income", and in some cases capital, as much worse than resolution 125 in 2008 when the government unsuccessfully tried to impose a 45% export tax on soyabeans and sunflowers.

Navarro quoted Agricultural Studies Regional Consortiums (CREA) figures showing typical farming land in Pehuajó, Buenos Aires province, earning ARS3,392 pesos (US$755) per hectare where 84% of income was taxed.

National levies include a witholding tax, value added tax (VAT), presumed minimum income, personal property and social security taxes while provincial charges covered real estate, gross income, patents and road rates.

He said national government accounted for 93% of tax,  followed by Buenos Aires province at 5% and local municipalities at 2%, which showed "fiscal federalism".

Other factors which he said had influenced income included droughts and floods, and lack of counter-cyclical policies to address them.

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