Argentina’s Export Tax Reform: Unlocking Growth Potential
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Argentina has historically relied on export taxes as a major source of government revenue. However, high tariffs have constrained production and exports, reducing the taxable export base and limiting economic growth. The Milei administration has recently taken steps to reduce some export taxes, including lowering soybean duties from 26% to 24% and temporarily suspending duties on grains, aluminum, and steel to support production and increase foreign currency reserves.
Economic Impact of Export Taxes
Suppressed Production and Exports: High export duties place pressure on Argentina’s most competitive sectors, diverting capital and labor to less-taxed activities. Stagnant exports also reduce foreign currency inflows, complicating debt repayment.
Fiscal Dependence and Inertia: Since their reintroduction in 2002, export taxes have accounted for 10%-20% of federal revenues, well above the Latin American average of around 4%. This reliance creates fiscal inertia, making immediate removal challenging.
Reform Path and Policy Recommendations
To unlock export potential, Argentina should pursue a gradual reduction of export duties while offsetting revenue loss through other measures:
Optimize Tax Structure: Improve tax collection efficiency and expand the tax base by formalizing parts of the informal economy.
Phased Reduction of Import Duties: Facilitate access to production inputs while coordinating with Mercosur partners.
Maintain Currency Stability: Lower export taxes can increase exports, boosting foreign currency inflows and supporting debt obligations and monetary stability.
The Milei government has already achieved a fiscal surplus, a rare outcome in the past two decades. Combining further export tax reductions with fiscal discipline and broader economic liberalization could establish a more sustainable, export-driven growth model for Argentina.
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