New tax on inputs paralyzes imports in Argentina

The Argentine government announced the implementation of a new tax on imports called PAIS (Imposto for an Inclusive and Solidarity Argentina).

The uncertainty generated by the decision is paralyzing the marketing and operations of agricultural inputs.

The new tax will have an applied rate of 7.5%, and will include items sought after by Argentinians abroad, such as agrochemicals and fertilizers.

However, fuels, lubricants and goods related to power generation, as well as inputs and intermediate goods, will not be covered by PAIS.

According to Argentinian economists, taxes will be charged by banks when importers use the exchange market.

The fee will apply 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, said entrepreneurs in the agricultural inputs sector.

The tax can generate significant distortions in the market, harm the entire value chain, discourage producers from selling their products, and, therefore, harm the generation of foreign exchange, they stressed.

Entrepreneurs said that Argentina is currently experiencing a very complex macroeconomic reality, and all measures that jeopardize the agro-industrial chain should be avoided.

(Editing by Leonardo Gottems, reporter for AgroPages)