Paraguay to tax soybean exports.
| Autor | Gaudin, Andres |
Three years after Frente Guasu (FG), the party of deposed President Fernando Lugo (2008-2012), proposed a bill to tax unprocessed soybeans exports, Paraguay's Senate has surprisingly revived the idea and quickly approved it (NotiSur, Feb 17, 2017, March 31, 2017 and June 9, 2017).
When proposed in Congress in 2014, the bill proposed a 15% tax on the exports of unprocessed soybeans, corn, and wheat. However, the powerful agricultural lobby forced negotiations that reduced the tax to 10% on the oilseeds and removed wheat and corn from the list, leaving the latter two at zero taxation. The FG's legislative goal had been to increase the tax revenues while also discouraging exports of raw grains, and thus use labor in the production of soybean oil and soy flour.
Bill blocked by agro-export sector
In 2014, the agro-export sector managed to stop the project, backing instead a new agricultural income tax (Impuesto a la Renta Agropecuaria, IRAGRO). Proponents of the IRAGRO said it would raise US$250 million a year, but "it ended up being one more scam, and served only to block the soybean tax," Lugo said during the parliamentary debate. In fact, only 20% of the projected income was collected.
"The IRAGRO was written and agreed upon with the great evaders: the soybean farmers and the cattlemen, but now things are different," Lugo added.
According to the original project, and using export totals from the previous season, the state coffers would have received an additional US $270 million annually, but with the tax reduction approved June 22, the income will be US$180 million. For the Paraguayan economy, that amount is a significant figure.
The effort to change the bill or modify the effects of the tax had the backing of President Horacio Cartes' extensive network of print, radio, and television media. Their campaign tried to frighten Paraguayans by calling the tax "a dangerous sign of Marxist penetration."
Voicing the view of those in favor of the tax, Mercedes Canese, an agronomist and FG adviser, said, "The measure is strictly liberal; it is neither socialist nor leftist; it is not revolutionary; it amounts to a transition from the feudalism of the Middle Ages to the Industrial Age, barely the most modern form of capitalism."
Final approval of the project now requires a vote in the Chamber of Deputies, and although the parties have agreed to move it forward, it will still face serious obstacles. "The coercion of soybean growers will be much greater...
Para continuar leyendo
Solicita tu pruebaCOPYRIGHT GALE, Cengage Learning. All rights reserved.
