Saturday, May 18, 2024

ARGENTINA | 06-06-2022 21:34

Fernández, Guzmán seek special tax on Ukraine war windfall profits

Reacting to tensions in the ruling coalition, President Alberto Fernández vows to move ahead with windfall profits tax and tells Congress it has the “obligation to support” the bill.

President Alberto Fernández vowed Monday to pursue a special tax on company profits boosted by the war in Ukraine, a phenomenon he described as an "immorality" given the inflationary pressure on poor households.

While millions were feeling the pain of rising food prices, the war also  "benefits the few... who are gaining a lot," the Peronist leader, under pressure amid coalition tensions, said in an address.

It is a windfall “that nobody expected to have, because nobody expected a war of these characteristics," said Fernández.

"This is an immorality, an indecency, which as the State we cannot allow," he said, repeating his plan for a once-off special tax in 2022 on some companies with taxable profits of more than a billion pesos (some US$8 million) and see an increase of more than 10 percent of normal profits.

Argentina has a poverty rate of about 37 percent, and a projected inflation rate of 60 percent for 2022.

Fernández did not say which sectors would be targeted for the tax, but cited the rise in wheat, sunflower and maize prices in recent months – all products of which Argentina is a major exporter, along with beef.

Attempting to head off opposition criticism, he said the measure was not something plucked out of the air, highlighting similar measures adopted by other governments worldwide.

"It is not something out of the blue, the world has done it and is doing it, Britain is doing it, Italy is doing it," said Fernández.

The Frente de Todos leader, with Economy Minister Martín Guzmán by his side, urged lawmakers to support the initiative when a bill is presented in coming weeks. The governing party, however, does not have a majority in Congress.

"Congress has the obligation to support the bill, it is an obligation of all deputies and senators, we need a few people not to earn so much at the expense of the majority," declared the president.

Guzmán has previously stated that the government’s measure would affect only "very large companies in Argentina".

Last month, the British government announced a temporary windfall tax on oil giants benefiting massively from surging crude prices.



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