A bill to fight tax evasion has sparked a row between the Argentine government and the country’s agricultural sector, as exporters warn of lower domestic grain prices and output.
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A proposal by the government to change the way its income taxes are collected has been approved by the lower house and is set to be debated in the Senate this week, reported Reuters.
The government claims exporters have been evading taxes by selling grain and oilseeds at low prices to shell companies outside the country in order to pay lower taxes on the goods. The shell companies then sell the goods on for higher prices, the government claims.
Exporters argue that having to pay taxes at the moment the goods are put onto ships, as the government proposes, rather than paying the taxes at the time the export deal is closed, would cause problems because the value of the goods could be different at the time of shipment from the value at the time of sale.
“The price the farmer is going to get will be lower, which will lead directly to their not planting or to their deciding that at this price level they won’t sell and will hold onto their goods,” Raul Padilla, the president of the local unit of agribusiness Bunge, was quoted by Reuters as saying.
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