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The Argentine government announced the implementation of a new tax on imports called PAIS (Tax for an Inclusive and Solidarity Argentina). The uncertainty generated by the decision is paralyzing agricultural input sales operations.
The rate of the new tax that will be applied will be 7.5%, and this includes items that are highly sought after by Argentines abroad, such as agrochemicals and fertilizers. Fuels, lubricants, and goods linked to energy generation, as well as inputs and intermediate goods will continue without PAIS payment.
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According to Argentine economists, tax will be charged by banks when importers use the foreign exchange market. The rate applies to imports from all regions of Argentina, including the Free Zone and Special Customs Area of Tierra del Fuego.
The measure will affect rural productivity, say businesspeople in the area of agricultural inputs. According to them, the tax can generate major distortions in the market, harm the entire value chain, discourage producers from selling their products and, therefore, harm the generation of foreign exchange.
Businesspeople say that Argentina is currently experiencing a very complex macroeconomic reality, and that all types of measures that harm the functioning of the agro-industrial chain should be avoided.
Source: Leonardo Gottems | agrolink
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