Argentina eliminates export duties for thousands of manufactured goods

Argentina’s government will eliminate the taxation for more than 4,000 industrial exports, Economy Minister Luis Caputo has announced.

In a post on his personal X account, Caputo said the move is designed “to make local industry more competitive and encourage exports."

Caputo pointed out that the elimination of export duties of around 3 to 4.5 percent on 4,411 products "will initially benefit 3,580 companies, almost 40 percent of Argentina’s exporters."

The products which will now be tax-exempt were exported for a value of US$3.804 billion last year, detailed the minister.

This decision responds to pressure from different sectors within the UIA (Unión Industrial Argentina), who last week demanded measures to favour PyME small and médium-sized companies, in particular when it comes placing their products abroad.

Some sectors like iron, steel, aluminium, petchems and the auto industry will continue paying taxes.

Caputo justified the decision by pointing to "more ordered public accounts," which make "continuing to lower these distortionate taxes" possible.

Since taking office in December, 2023, President Javier Milei’s government has implemented draconian austerity measures reducing public spending by 4.7 percent of GDP.

The effort has helped lower annual inflation from 211 percent in 2023 to a still high 118 percent last year. Monthly price hikes are now running at between two and four percent.

Milei’s economic programme included a new loan from the International Monetary Fund (IMF) for US$20 billion along with a further US$ 22 billion from other multilateral organisations.

Argentina already has a debt of more than US$40 billion with the IMF.

In return to the recent influx of financial support, the Milei government last month lifted many of the strict currency controls in force since 2019, introducing a new exchange rate whereby the dollar floats between bands of 1,000 and 1,400 pesos.

Caputo said in his social media post that "the government will eliminate the export duties for 88 percent of industrial products.”

He added: “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 detailed 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.”

"Along these lines, last January the Industry & Commerce Department of the Economy Ministry eliminated the export duties on the agro-industrial activities of regional economies and their value chains such as cotton, paper, cardboard, food and beverages, besides reducing the export duties on the main agricultural products," he added.