Argentine Government Announces List of New Economic Measures

RIO DE JANEIRO, BRAZIL – This is a list with a summary of the measures announced by the Government to boost the dollar supply through an increase in exports.

“Minutes ago the Central Bank of the Argentine Republic announced the direction of the monetary policy that it is seeking and involves a reconciliation of what is known as the interest rate structure, within the context of the pandemic, we have been forced to resort to Central Bank financing in a broad way and we have had to create credit conditions to sustain the different economic sectors and thereby be able to control as best as possible what Covid-19 has brought us,” said the Minister of Economy, Martín Guzmán.

Financial sector

Guzmán highlighted that the Ministry of Finance will put out to bid next Tuesday an instrument in pesos tied to the value of the dollar.

“An instrument is being proposed for those who want to tie the dollar to their holdings in pesos in order to ensure that they will retain their value while simultaneously, given the real exchange rate policy, which we reiterate, aiming at a higher yield for assets in pesos that have positive returns in real terms at rates that are sustainable and that all this will contribute to continuous generation of better credit conditions for the development of the productive sector, for companies, for SMEs as part of that universe,” he said.

Agro-industrial sector

– Compensation and incentive to small soybean producers and cooperatives. Public investment of up to US$11.55 billion for the sector. Compensation to small and medium-scale producers is higher for regions farther from the country’s center. This is clearly a federal development issue which is part of the principle on which our economic development strategy is based.

– Export rights scheme for the soybean industry: the tax rates are temporarily reduced for both sales of soybeans abroad and for their main derivatives. Guzmán explained: “It is reduced from the current 33 to 30 percent in October, rising to 31.5 in November, 32 in December, converging to 33 percent in January” and added “there are reductions for raw soybean oils, refined bottled soybean oils, soybean hulls and biodiesel, in the case of oils the reduction reaches 27 percent in October, converging to 30-31 percent in January 2021, thereby creating a gap between the grain and the oils. For biodiesel, the rate is reduced from 30 to 26 percent in October 2020, converging to 29 percent in January 2021.

Industrial sector

We are changing the scheme of export rights and export refunds with a strategic approach that seeks to encourage production with higher generation of added value, encourage exports and diversify the productive basket while promoting job creation,” said Guzman.

Measures:

– Lowering of export duties on industrial finished goods to 0 percent and on industrial processed inputs to three percent. In the case of the automotive sector, the drop to 0 percent for final products is only applicable to automotive exports outside of Mercosur.

– We raised the export refund floor based on added value: we raised industrial finished goods to seven percent and industrial processed inputs to five percent.

Measures linked to the mining sector

– Regulation of the Law of Social Solidarity and Productive Reactivation that established a ceiling of eight percent for the export taxes on metals. “This is a reduction of the export taxes of metals to eight percent, down from the current 12 percent, which is the eight percent ceiling,” he explained at the press conference.

Measures linked to the construction industry

Tax benefits to encourage investment in new projects

– Personal Property: Three-year exemption on financial assets used for new buildings. “We will be sending a bill to Congress that will deduct personal assets from financial assets in pesos, the portion that is still recorded today, assets such as marketable bonds, thereby creating a more favorable environment for financing productive investments,” explained the Minister.

️- Income Tax: The payment of Income Tax and Property Transfer Tax corresponding to the contribution of a property (land, for instance) to a development project is deferred until the time the work is completed or collected.

-Creation of a Hedge and Promotion Trust Fund to provide sustainability to the Mortgage Credit system

– Financing: The fund will be self-sustained, financed with contributions from financial institutions and with a share of credit quota.

– ️The fund will be managed by the Argentine Mortgage Agency, which was established to promote Bank Mortgage Credit and mobilize national savings, thereby strengthening the financial market in pesos.

Introduction of export plans and creation of foreign currency savings

– For specific sectors with export potential and with options for import substitution that will save foreign currency and generate employment. Among these sectors are meat, wine, knowledge-based economy, automotive, oil and gas, industrial forestry, textiles, footwear, mining and metalworks.

️

More: Latin America news in English, every day from The Rio Times.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error