Income tax

Argentina proposes ‘extraordinary income’ tax amid grain bargains

BUENOS AIRES, June 6 (Reuters) – Argentina’s government on Monday proposed a bill to tax companies that earn “extraordinary income” from the war in Ukraine, a move that would particularly hit the country’s grain industry.

The move is seen as an attempt by Argentina’s centre-left government to reduce the budget deficit and help Latin America’s third-largest economy cope with runaway inflation, which is expected to top 70% this year. Read more

The bill aims to levy an additional 15% tax on companies whose profits exceed 1 billion pesos (about $8.3 million) in 2022 and whose profit margin is either greater than 10% in real terms, be 20% higher than in 2021.

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Analysts say sectors like food, energy and agriculture would be hit the hardest, given that Argentina is one of the world’s largest grain and meat suppliers.

The proposal will have to be approved by Congress, where it will need the support of an opposition that has already expressed its rejection.

The bill is approved by the International Monetary Fund (IMF), with which Argentina recently restructured a debt of 44 billion dollars.

“Some sectors have benefited from the war due to the rise in raw materials,” Economy Minister Martin Guzman said when presenting the bill to Congress alongside President Alberto Fernandez.

(Exchange rate: 1 dollar = 121.11 pesos)

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Reporting by Jorge Otaola; Written by Carolina Pulice; edited by Richard Pullin

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