The Ministry of Finance reports that this Tuesday (14.8.2018) three decrees have been signed through which a tax savings estimated at 12.500 billion pesos for the remainder of 2018 and 53.000 billion pesos for 2019.
Refunds, Soy and Solidarity Fund
According to the statement, the measures imposed on soybeans establish the following:
1. Export Refunds: Is reduce by 66% the total amount paid in export refunds, according to a scheme differentiated by product. Export refunds justify their existence in the validity of indirect taxes that accumulate during the production process and that are not refunded upon export. The tax reform and the fiscal pact, which reduce taxes on checks and gross income, create the space for such refunds to be reduced.
The fiscal savings (shared between the Nation and the Provinces) from this measure are $5.000 billion in 2018 and $29.000 billion in 2019.
2. Export Rights on Soybeans: is maintained planned reduction in the grain rate and the reduction established for oils and flours is suspended for 6 months. The soybean tax rates have been steadily reduced, from 35% in 2015 for soybeans to the current 26%, with a forecast of convergence to 18% in December 2019. As for oil and flour, the rate was reduced from 32% in 2015 to the current 23% and will also converge to 18% in December 2019.
The additional revenue for the Nation from this measure is $1.500 billion in 2018 and $12.000 billion in 2019.
3. Federal Solidarity Fund: the Fund through which the Fund is established is eliminated through a Decree of Necessity and Urgency. transferred 30% of the collection of export duties on soybeans to Provinces and MunicipalitiesThe FFS was created in 2009, when the provinces received only a quarter of the national tax revenue. Thanks to decisions taken by the National Government, the provinces have now received a third of the national resources and will continue to increase their share in the coming years, which makes the continuation of this compensation mechanism unnecessary. The reduction in export refunds, which is deducted from the revenue collected, partially compensates for the loss of income of the provinces.
The fiscal savings for the Nation are $8.500 billion in 2018 and $26.500 billion in 2019.
These Three decisions are part of the process of convergence towards fiscal balance by 2020, which will later be complemented in the Budget Project by measures related to the expenditures of the National Government.
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