Government to hike duties on soy products, but not corn or wheat

Argentina’s government is singling out soybean shipments as it looks to raise more revenue to plug budget gaps, pay down debt and kick start the economy.

Shipments of raw soybeans, as well as cooking oil and livestock feed made from the oilseed, will be taxed at a rate of 33 percent, up three percentage points from current levels, under a measure that may be implemented as soon as Wednesday, according to people with knowledge of the matter.  Argentina is the world’s biggest exporter of the soy products.

Maize and wheat cargoes will be spared from another tax hike, with the rate expected to stay at 12 percent, said the people, who asked not to be named because talks are private. A law passed in December allows for corn and wheat taxes to increase to 15 percent.

The higher rate on soy would be President Alberto Fernández’s second farm-tax hike since he took office in December amid a severe economic crisis, in a reversal of the agriculture-friendly bias of the previous administration.

Fernandez – who said in a speech Sunday he was proposing to raise taxes on just one crop, without elaborating – is targeting a product that isn’t widely consumed by his constituents. The approach is a throwback to measures taken by his deputy, Cristina Fernández de Kirchner. When she left the presidency in 2015, soy exports were taxed as much as 35 percent.

A spokesman for the Agriculture Ministry didn’t respond to a request for comment.

Authorities have already suspended the country’s export-registration system, a move traders said signals the tax changes are imminent.