The increase in withholdings of the Government of Javier Milei brought the first blows in the agricultural sector. The intention to raise export duties to 15%, except for soybeans, raised questions about its economic impact on each of the sectors. A private report calculated how it would affect each sector.
According to calculations made by the chief economist of Mediterranean Foundation-IERALJuan Manuel Garzón, if this increase materializes, the Argentine State could collect more than an additional US$1,082 million in 2024, raising the total figure of withholdings to about US$7,388 million.
This measure, which still must pass through the National Congress, raises the question of whether it will provide a break to reach the fiscal goal that Javier Milei set for himself.
In this sense, Garzón stressed that, under current conditions, the agricultural sector will contribute significantly to the Argentine treasury, experiencing a 43% increase in withholdings, reaching US$6,306 million. This increase already reflects the productive recovery after the historic drought that affected the country. If the proposal to increase the rates is finalized, the jump compared to the 2023 contributions would be 68.1%, equivalent to an additional US$2,933 million.
Likewise, in terms of the Gross Domestic Product (GDP), The projected collection for 2024 from export duties on agriculture would represent 1.42% of GDP, a significant increase of 0.73%. On the other hand, the implementation of the rate increase would bring this total figure to 1.67% of GDPreflecting an improvement of 0.98 percentage points compared to 2023.
Increase in withholdings: how it would impact sector by sector
Meanwhile, if the official plan of increase withholdings, various agricultural sectors would experience increases in contributions to the State coffers. Wheat and corn, for example, would be taxed 3 percentage points more, raising the current rate of 12%. Meanwhile, the beef would face an increase of 6 points, from the current 9%. Also, the sunflower and dairy would see their rates increased by 8 and between 10.5 and 8 points, respectively. On the other hand, many regional economies, which currently pay 0%, would directly pay 15%, detailed from the Mediterranean-IERAL Foundation.
Furthermore, when analyzing each agroindustrial chain, it is observed that the increase in contribution would not be uniform. Excluding soywhich maintains an unchanged rate of 33%, the complex corn and wheatfor example, would experience increases of u$s1,036 au$s1,295 million ydUS$309 US$422 million, respectively. For minor crops, such as barley, sorghum and sunflower, increases are also expected, while peanuts, considered a regional economy, would go from contributing nothing to contributing US$159 million.
Finally, in the meat sectormeatpackers would face an increase in their export duty payments, going from US$267 million to US$445 million. On the other hand, the dairy would increase their contribution of US$ 0 to US$ 190 millionand in balanced foods and other sectors, the contribution would increase US$43 to US$93 million. This possible scenario generates concern in agriculture, since it adds to the series of economic challenges facing the sector.
Source: Ambito
