The central government once again changed the rules of the game in terms of foreign trade, shortly after adopting measures
More improvisation with foreign trade measures
Wednesday, May 22, 2019, 19:00 (GMT + 9)
In an article published today, Revista Puerto highlights an issue that is reoccurring and worrisome both for fishing companies, producers and exporters as well as foreign partners and importers worldwide that can not understand sudden changes, commonly called " U-turn ".
At the beginning of the month, the national government raised the statistical rate for imports from 0.5% to 2.5%. Three weeks later, they decided to temporarily fix, until the end of the year, at 0% the aliquot of the statistical rate applicable to certain capital goods and to the suspensive destinations of "temporary importation". Another improvised measure as well as the failed "removes" of withholdings.
The national government once again changed the rules of the game in terms of foreign trade, shortly after having adopted measures, which were strongly questioned by productive and industrial sectors, such as the "fivefold" increase in an import rate.
Two weeks before the announcement in which the so-called statistical rate of imports rose from 0.5% to 2.5%, now they simply eliminated it for temporary imports and capital goods, but only until December 31.
The fishing industry has a strong component of imported inputs in its productive structure, both for the assembly of ships and for the operation of processing plants. Now temporary imports, those of capital goods destined for new and used production, would be left out of the scope of the initial measure.
Through a decree it was made official that some imports will be exempted from the payment of the statistical rate. A recently disposed measure is partially annulled, where the aliquot of this rate went from 0.5% to 2.5%, generating complaints from the importing sector.
The degree of improvisation with which measures are announced and then modified on the fly generates uncertainty among investors who must plan the decision making, and within the fishery something similar happened in the last month regarding an alleged elimination of rights of export, which in the end ended up being a meager tax loss.
Announcement and fiasco
More than 95 percent of the production of the fishing sector is exported, so the announcement that export taxes would be removed for SMEs that sell up to 50 million dollars opened a framework of expectation, since it had been said that the benefit would be for those who will increase their volume with respect to the previous year. That seemed a proactive measure that encouraged to increase the exportable quantity or to add added value to the products.
Buenos Aires port (Photo: stockfile)
From the time it was announced until it was implemented, three weeks passed. A first decree was followed by another that partially annulled the previous decree and defined the requirements and scope of what was no longer a withdrawal of export duties, but ended up being a tax reduction.
In short, from what is exported more than last year, a reduction of up to 600 thousand dollars on that surplus will be allowed, and after that amount of 600 thousand dollars, the withholdings remain the same. That is, an SME exporter that in 2018 marketed products abroad for up to 50 million dollars, in 2019 will have a maximum benefit of one million eight hundred thousand pesos.
Source: Nelson Saldivia/revistapuerto.com.ar