The Government ordered to advance in a partial and transient reduction of export rights over the main crops. In a context of low international prices, adverse climatic conditions and delay in the exchange rate, sensitivity to react against agriculture problems was demonstrated. The worrying thing is that the measure is just a palliative for producers, but demands a great effort for the nation in order to preserve fiscal balance.
The strategy of Partial and transitory reduction of export rights is in tune with the idea of the government of Go gradually reduce distortive taxes as public spending down and grow the GDP. The difficulties generated by this attempt to reduce just a portion of export rights – only one of the main distortive taxes – motivates serious doubts about the possibility of moving towards a more generalized decline of all distortive taxes.
A basic starting point to dimension the challenges of eliminating distortive taxes is to quantify its collection. Considering only the most important distortive taxes, according to data from the Ministry of Economy referring to 2024, it is observed that:
- The Export rights contributed the equivalent of 1.0% of GDP.
- He Check tax collection 1.6% of GDP.
- Gross income and Stamps It is estimated that they generated 4.4% of GDP.
These data show that The partial reduction of export rights is a necessary but very important step against the challenge of eliminating all distortive taxes. If this small decrease in export rights is very challenging for the national public sector, much more will be to eliminate them completely and also eliminate the check tax. More difficult it will be to make, with a gradualist approach, the provinces also eliminate gross income and stamps.
The case of the decrease in export rights exemplifies that a comprehensive reform strategy is more conducive. The reduction of export rights automatically leads to agricultural producers paying more profits, VAT, gross income and stamps. Process that will intensify as production increases thanks to the best incentives to invest. The result is a paradoxical situation: while 100% of the loss of collection due to the decrease in export rights is supported by the Nation, most of the increase in collection in the other taxes generated by this decline is received by the Provinces. The provinces receive the increase in co -participible tax collection (profits and VAT) and provincial taxes (gross income and stamps). This contradiction, typical of gradualism, makes the tax decline at a very slow pace.
A more comprehensive strategy would allow much faster to advance in tax elimination. In the specific case of the reduction of export rights, it should be agreed with the provinces that the collection increases generated in the agricultural sector are 100% destined to finance tax decline. An alternative could be to create a specific assignment – by an approximate magnitude of the increase in the collection generated by the decline in export rights – in favor of the nation. In this way, the nation could advance much faster in the elimination of all national distortive taxes. In parallel, provincial governments should commit to using collection increases generated by the decrease in export rights to reduce their own distortive taxes (gross income and stamps).
It is very positive that several governors emphatically support the idea of lowering taxes. It is an unprecedented opportunity to promote a fiscal coordination agreement between the Nation and the provinces, a majority being enough – not necessarily – the provinces to advance in the integral order of the Argentine tax system.
*Jorge Colina is an economist and president of IDESA
By Jorge Colina
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