Argentina’s government is set to abolish taxes on over 4,000 industrial exports, as announced by Economy Minister Luis Caputo. In a post on his personal X account, Caputo stated that the initiative aims “to make local industry more competitive and encourage exports.” Caputo highlighted that the removal of export duties ranging from 3 to 4.5 percent on 4,411 products “will initially benefit 3,580 companies, almost 40 percent of Argentina’s exporters.” The minister detailed that the products now exempt from taxation were exported last year for a value of US$3.804 billion.
This decision is a reaction to the demands from various sectors within the UIA (Unión Industrial Argentina), which last week called for measures to support small and medium-sized enterprises, particularly regarding the export of their products. Certain sectors, including iron, steel, aluminium, petrochemicals, and the automotive industry, will persist in their tax contributions. Caputo defended the decision by highlighting “more ordered public accounts,” which enable “continuing to lower these distortionate taxes.”
Since assuming office in December 2023, President Javier Milei’s administration has enacted stringent austerity measures, resulting in a reduction of public spending by 4.7 percent of GDP. The initiative has contributed to a reduction in annual inflation from 211 percent in 2023 to a still elevated 118 percent in the previous year. Monthly price increases are currently occurring at a rate of two to four percent. Milei’s economic programme encompassed a new loan from the International Monetary Fund for US$20 billion, in addition to another US$22 billion from other multilateral organisations. Argentina currently holds a debt exceeding US$40 billion with the IMF.
In response to the recent surge in financial assistance, the Milei administration last month eased numerous stringent currency regulations that had been in place since 2019, implementing a new exchange rate system that allows the dollar to fluctuate within a range of 1,000 to 1,400 pesos. Caputo stated in his social media post that “the government will eliminate the export duties for 88 percent of industrial products.” He stated: “From now on, 4,411 products will not have to pay export duties of between three and 4.5 percent on the value of the merchandise.”
He noted that “last year the exports of these products accumulated US$3.804 billion in value, including farm and other machinery, optics, glass, car parts, watches, preparations by the pharmaceutical industry, cables and insecticides, as well as other products with high added value like cosmetics, pumps, plastics and metals, among others.” “In this context, last January, the Industry & Commerce Department of the Economy Ministry removed the export duties on agro-industrial activities within regional economies and their associated value chains, including cotton, paper, cardboard, food, and beverages, while also decreasing the export duties on key agricultural products,” he noted. Caputo stated that “export duties make these Argentine companies less competitive abroad and discourage them from exporting.”