A partial reduction to export rights for meat, corn, sorghum, sunflower, soybeans and soy derivatives was arranged. In the case of meat and sunflower, the reduction is 25% while corn, sorghum and soybeans and derivatives is 20%. The announcement includes the commitment not to ride the measure and deepen it, to total elimination, when there is fiscal space.
Export rights are a very bad tax because it discourages production. For example, at the beginning of the century Argentina had a grain production similar to that of Brazil, while today it is less than half. One of the main explanations is that Brazil, like most countries, do not apply taxes on their agricultural exports. But the problem is not only the withholdings, but, together with them, The State appeals to other distortive taxes that also damage the competitiveness of national production.
The national, provincial and municipal tax pressure reaches approximately the 28% of GDP. Within it, according to the Ministry of Economy by 2024, it is observed that:
– He National State Apply export rights by the 1.0% of GDP and the check tax for the 1.6% of GDP.
– The Provinces the tax on gross income and stamps with which approximately the 3.9% and 0.4% of GDP, respectively.
– The municipalities rates apply to sales with which they would be raising no less than 0.5% of GDP.
These data show that the taxes that most damage competitiveness represent approximately the 7.4% of the GDP, that is, more than 1 in 4 pesos that collect the three levels of the State. In this perspective, the partial reduction of export rights (which would be equivalent to 0.2% of GDP) is a very marginal relief for production. But of great fiscal effort for the State as it represents two thirds of the financial surplus. It is very contradictory that a faint relief for production and only for the agro -export sector is such a large obstacle for national public finances.
Assuming that the fiscal balance is priority and also that it is essential to eliminate taxes that remove competitiveness to national production is evidenced that it is necessary to seek better alternatives. It is clear that with “tax gradualism” the road is excessively long, since it will demand a long time to go down public spending to, depending on this, giving relief to the productive sectors.
A more comprehensive strategy would allow to eliminate bad taxes, preserving fiscal balance, at rhythms more in line with what production demands. For example, the decrease in export rights will generate increases in the collection of other taxes, such as profits, VAT, gross income, seals and municipal fees. This will partially compensate for the income losses of the national state. For the provinces and their municipalities, it will imply greater resources due to increased co -participation and collection of own taxes. Therefore, It should have been agreed that these additional income is destined to reduce provincial and municipal taxes that damage competitiveness. Agricultural production not only suffers from competitiveness for export rights, but also because it pays more expensive supplies because in its price gross income, tax on municipal stamps and fees.
With a comprehensive ordering strategy of the tax system you can go much faster towards the objective of eliminating distortive taxes without compromising fiscal balance. To do this, the approach must be expanded and, the most challenging, to involve provincial governments. The most illustrative example is that, based on a nation agreement with a majority group of provinces, it could be eliminated (not only reduce) gross income and municipal rates on sales creating the super -iva.
By Jorge Colina
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