Javier Milei’s government will collect 140% more withholding taxes for the large soya and corn harvest expected after a drought-ridden 2023.
According to a report from the Rosario Stock Exchange, with the current tax regime, it is estimated that the collection of withholding taxes in the new year will reach 7,350 million dollars for the main agro-industrial complexes. This means a strong increase of almost 140% compared to what was collected in the year that ended.
However, according to the stock exchange body, That would be lower than the previous two years, 2021 and 2022periods in which the international prices of the main products were well above their historical trend, thus supporting collections.
The soy sector would once again become the largest contributor, with $5.7 billion (180%), while corn would once again be the second largest contributor, with $1 billion (33%). The podium would have been closed by the grain complex, with 340 million dollars, more than 10 times more than what was paid in the past year.
“It should be noted that, however a large part of the 2023/24 season has already been sold abroad and, therefore, has already paid contributions through DEX, the pre-sales of cereals for the next 2024/25 campaign would partially compensate for the lower harvest,” clarified the institution.
However, in the draft Law on the Bases and Starting Points for the Freedom of Argentines, recently presented to the National Congress by the new government Export duty rates are proposed to be increased to 15% of all products as well as the elimination of the tariff difference for complex soy products. In the latter case, that is, the rates of flour and oil would be increased by 2 percentage points, reaching 33%, as currently happens for soybeans.
If this point is approved and within the framework of the proposed tariff regime, It is estimated that the collection of withholding taxes will reach 8,050 million dollars, $700 million more than the current tariff scenario. “This scenario assumes that the new rates take effect starting in February, so the current rates remain in place,” she said.
The greatest impact would be recorded in the soy supply chain, which, from one scenario to another, HeyIncreases its contribution by $300 million. Corn, meanwhile, would increase its contribution by $200 million. Another point to highlight is the increase in the sunflower chain, which goes from $67 million in DEX contributions in the current tariff scenario to $162 million in the new scheme (+140%). This large relative increase in the contribution amount is due to the fact that oilseed by-products are currently taxed at 5% and seeds at 7%, so the proposed change in the rates increase to 15% has a greater impact in this chain.
It is worth mentioning that the six major grain value chains (soybeans, corn, wheat, sunflower, barley and sorghum) paid $3,078 million in export duties to the nation state in 2023.
Source: Clarin
