Argentine President's Export Tax Powers Retained

by Mike Godfrey, Tax-News,com, Washington

14 August 2009

Argentine President Cristina Fernandez de Kirchner's presidential power to set farm export tax levels has been extended for a further year, a move likely to have bitterly disappointed the country's farmers, and their champions amongst the opposition.

The ability to set export tax rates is part of a package of extraordinary powers granted to Argentine presidents at the discretion of Congress. The law granting such power was set to expire this year. The government views the power as an essential revenue-raising tool.

The farming sector is already being squeezed by a drop in commodity prices and a severe drought. Farmers had hoped that the increasingly unpopular president, who lost control of Congress in late June, would not be granted an extension of the powers, raising the possibility of a reduction in the high export and other taxes on agricultural produce.

Following the 136-100 vote, which reportedly took place after a full day of heated debate, the extension of the extraordinary presidential powers must now be approved by the Senate.

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