Nov 08, 2018
Paraguay Congress to Debate 10% Tax on Soybean Exports
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
During the month of November, the Paraguayan Congress is set to debate a proposed law that would impose a 10% tax on soybean exports from the country. The proposal was introduced and approved in general in June of 2017, but further action on the measure was postponed for further consideration.
The Production, Industrialization and Marketing Federation of Paraguay (Feprinco) has expressed their opposition to the proposal indicating that it would hurt the competiveness of Paraguayan soybean producers. They stated that the only way to compete internationally is to have lower production costs and such a tax would make it harder to compete. Taxes such as this are paid primarily by producers in the form of lower prices and it could result in lower soybean production.
The proposed tax would not affect corn or wheat exports. The original proposal was for a 15% tax, but that was subsequently lowered to 19%. The proposed tax has generated a heated debate both for and against the tax.