Yesterday, the Government ordered a 10% increase in the price of biodiesel and bioethanol that mixed with fuels. The measure, which takes effect today, increases the value that consumers pay at the pump. Also, the Liquid Fuels Tax shall update tomorrow.
Transparency Internacional's (TI) report is harsh on Argentina, which, although it has made progress in anti-corruption legislation, still lacks sanctions and transparency in information. Argentina, as measured by TI, contributes only 0.3% of global trade and is among the 15 countries that registered limited actions. The so-called law of corporate criminal responsibility, sanctioned in 2018, achieved a step forward in the fight against corruption and its image worldwide. However, so far, no company has been charged under this law.
The Uruguayan government persists in implementing measures that encourage the business climate and offer more tax exemptions to those who invest and generate jobs. The government signed a decree that lowers taxes and makes the requirements to take advantage of these benefits more flexible.
The regime for the promotion of the Knowledge Economy becomes law, which grants a set of fiscal incentives for the development of essential industries for the country. Companies will be able to convert up to 70% of the employer contributions paid into a tax credit voucher and will be able to use it for up to 24 months from its issue for the cancellation of national taxes. They will enjoy an income tax reduction in a percentage that varies according to size, 60% discount will apply for SMEs and micro-SMEs, 40% for medium and 20% for larger ones.
Argentina has temporarily cut soybean, soymeal and soyoil export taxes by 3 percentage points to 30% to help stimulate export revenue, as the country struggles with recession and dwindling foreign reserves. The tax cut will last until the end of the year before being restored to 33% in January. “We seek to strengthen the country’s international reserves,” Economy Minister Martin Guzman said in a televised address.
Argentina's government is weighing a temporary reduction on some export taxes to boost dollar inflows as its foreign reserves fall to a three-year low, according to people with knowledge of the matter. Officials are still discussing which products will be considered in the measure, the percentage of the tax reduction, and how it will apply. Measures may be announced for soy soon and could apply in the month of October.
The Government informed that between October 15 and March 31 there are maturities of corporate debt for $3.3 billion. For companies with obligations over $1 million, they will only be able to buy on the dollar exchange market for 40% of the capital that matures. The rest has to refinance with new foreign debt with an average life of 2 years. The restriction points directly to the heart of companies leveraged in the capital market with negotiable obligations (ON) in dollars. It increases the risk of investing in Argentina.
Argentina on Wednesday unveiled a new 35 percent tax on foreign currency purchases to prevent the public from hoarding U.S. dollars in the face of a weak peso. The Government said it would tighten currency controls to dampen the demand for U.S. dollars. Previous restrictions remain in place, including limiting citizens to buying no more than 200 U.S. dollars a month. The new tax does not apply to spending on healthcare, medication, books in any format, online education and software for educational purposes.
The software or knowledge economy companies are still waiting for the Senate to treat the project that has been approved by the House of Representatives since June and that would benefit a sector that has the potential to sell some $6 billion a year abroad. The main risks are the loss of 11,200 jobs and the loss of 33.4 billion pesos ($446 mn) in revenue in 2020.
In recent days, images of fires throughout the country have affected the collective sensibility of an environmental catastrophe. It is not a temporary situation, but the consequence of a long process whose causes (economic, climatic, political, social) has led to the deforestation of 6.5 million hectares in the last two decades. Argentina is one of the ten countries with the most significant net loss of forests. According to satellite monitoring by Greenpeace, 21,275 hectares of native forests deforested between March 15 and June 30, 2020. In the case of Cordoba, more than 14,000 hectares were affected by the impact of fire - 95% intentionally - and the vast majority were the result of burning to expand agricultural and livestock activity and monoculture.