Argentine Court Upholds Legality of Grain Tax

Sliding-scale tax on exported grains will remain.

Published on: Jul 9, 2008

Tuesday an Argentine federal administrative court ruled in favor of the Argentine government in a challenge to the president's sliding-scale export tax on grains, according to media reports. On March 11 Argentina President Cristina Fernandez implemented an increase on export tax rates as export values rise, pushing taxes on soybeans up to about 45%, compared with a previous 35% levy. For months farmers have been on strike over the tax and halted soybean exports. As a result, U.S. soybean exports have been up considerably during the strike.

Lower courts had previously ruled that only the Argentine Congress had the power to impose taxes, whereas the latest ruling argued it is within the president's power to impose the tax. As a result of the protests caused by the strikes launched by farmers, the president submitted the tax proposal to the Congress for ratification. Over the weekend the House endorsed the tax and the bill is currently being debated in the Senate. Farmers lifted their latest strike last month hoping to successfully lobby Congress to vote down the tax with hopes the legal courts would overturn the tax.

Source: Feedstuffs