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NEWS ADMIN

Mahamad Rodzi Abdul Ghani

DATE

22/04/2002

NEWS PROVIDER

Mahamad Rodzi Abdul Ghani

NEWS SOURCE

NULL

CATEGORY

HEADLINE

ARGENTINA REVERSES CONTROVERSIAL EXPORT TAX
BUENOS AIRES, Argentina, April 19 (Reuters) - Argentina's governmentordered on Friday the repeal of an export tax change that had paralyzedgrains trade for three days, Cabinet Chief Jorge Capitanich said.Capitanich said the new decree effectively reverses another decreepublished on Wednesday that required exporters to pay export taxes on farmgoods at shipment time rather than at purchase."This decree should allow grains markets to resume normal operations,"Capitanich told reporters.The controversy over the tax change had led to the paralysis of thegrains market right in the middle of harvest, with numerous grain, oilseedand subproduct contracts to be filled at the end of April and thebeginning of May.Grain and oilseed exporters stayed out of the local grain market for athird day on Friday, awaiting confirmation the government would repealWednesday's decree.The government introduced the levies in March to boost tax revenuesthat have plunged during a four-year recession, a move many analystsargued would hurt the only dynamic sector of the economy and prompt a dropin grain and oilseed output next year.In April, the government doubled and in some cases quadrupled the taxrate to 20 percent for grains, oilseeds, vegetable oils and vegetablemeals. The rate for unprocessed oilseeds is 23.5 percent because the statecontinued a previous tax of 3.5 percent.Exporters had argued Wednesday's measure would make it impossible forthem to determine how much to pay farmers for their goods, making itdifficult for farmers to make seeding plans for the next crop, which couldcut production."The market is not operating," said a trader at a major internationalgrain firm. "Until the modification, the rectification, comes out in theofficial bulletin, we are not going to start operating again."Farm exports made up half of the $26.5 billion worth of goods Argentinashipped last year.

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