Image: Stockfile FIS

Request to Milei's Government to Suspend Fishing Export Taxes

ARGENTINA
Monday, May 27, 2024, 01:00 (GMT + 9)

The critical situation of international markets, high internal costs and the anchored exchange rate pose an extremely complex scenario for the fishing industry. CAPIP and CAPeCA required López Cazorla to manage the suspension of Export Rights for fishing. Bioeconomy applied a similar measure for dairy farming.

Currently, shrimp (Pleoticus Muelleri) easy peel or tail on, for containers of up to 1 kilo pays 1% export duties, and in the case of larger containers it is 3%. In turn, colas in containers of up to 2 kilos are taxed with 3% withholdings. For its part, whole shrimp is reached with 6% in boxes of up to 2 kilos. On the other hand, the export of tails in blocks larger than 2 kilos for reprocessing in other countries maintains 9%.

Source: Revista Puerto

In the case of hubbsi hake, frozen fillet prepared on land in containers weighing less than 1 kilo has 0 withholdings, and 3% in the case of heavier containers. Meanwhile, Illex squid rings do not pay withholding tax, while clean squid tubes in containers of up to 1 kilo are taxed at 5%.

Source: Stockfile FIS

Javier Milei during the campaign, in his electoral platform, proposed the outright elimination of withholdings on exports, but when he took office he submitted a project to Congress that, in addition to proposing the deregulation of fishing, intended for fishing products to be subject to tax. 15% withholdings. The strong reaction of the entire national fishing community managed to stop this attempt.

Source: Stockfile FIS -->

However, the current panorama of the Argentine industry in general, and the fishing industry in particular, exhibits worrying signs. According to INDEC's monthly economic activity estimator (EMAE), the economy fell 8.4% year-on-year in March and its collapse deepened. The monthly decrease in seasonally adjusted terms was 1.4%, accumulating two consecutive quarters with contraction. In this way, one of the criteria used to determine the existence of a recession was met.

Proposal to López Cazorla

In this context, the Cámara Argentina Patagónica de Industrias Pesqueras (CAPIP) and the Cámara de Armadores de Pesqueros y Congeladores de la Argentina (CAPeCA) elevated the president of the Consejo Federal Pesquero and Undersecretary of Aquaculture Resources and Fisheries of the Nation, Juan Antonio López Cazorla, a requirement by which they ask him to manage the suspension of export rights for the fishing industry.

«It is not beyond the knowledge of this Authority that the national and international context for the sector, at this time, is extremely critical. On the one hand, the impact of the war in Eastern Europe, general inflationary aspects in destination countries for our product, the continuity of post-pandemic restrictive measures in the Asian market, the abrupt drop in demand and falling prices; The additional competition resulting from farmed shrimp in a depressed market, all of this has meant that all companies have an unfavorable situation for their development," the business chambers explain.

Low demand and drop in international prices

With the signature of the president of CAPIP, Agustín de la Fuente, and the head of CAPeCA, Eduardo Boiero, the entities warn that "also as a consequence of inflation, costs will rise and imports will not even be from one dollar to 800 pesos but 940 pesos, given that the PAIS Tax of 17.5% is applied, so the equation is not beneficial for a sector with low demand and a drop in international prices," they detail when making a detailed description of the reality of the sector.

«The increase in capture and production costs, the increase in fuels, oils and packaging; higher logistics costs due to lack of greater maritime activity; the increase in provincial port costs; and the new and unjustified increases sought by the collective agreements, the effect of inflation on salary adjustments and the exchange rate delay carried over from previous years, becomes an unviable cost structure," CAPIP and CAPeCA warn in the note addressed to the Undersecretary López Cazorla.

Incentives to improve competitiveness

After exposing the variables that configure an adverse scenario for the fishing industry and the export sector, they point out that "we believe it is necessary, through the main character of the national fishing authority and as president of the main institution of federal fisheries policy (Federal Fisheries Council ) in this context of low international prices and weak demand from the main world consumer, national production enters the period of seasonal growth with a perspective of increased production levels that will result in an industrial decline.

Source: Revista Puerto

«That to improve the level of income of producers and the industry, promote the development and incentive of production and the addition of national value, boost sales to external markets, improve the competitiveness of the chain, it becomes necessary to temporarily suspend until on October 31 of this year, the Export Rights for the tariff positions of the Common Nomenclature of MERCOSUR (N.C.M.) corresponding to all fishing products," they propose from the business chambers.

They consider that the suspension of export duties for all fishing products "will provide better commercial conditions for the generation of foreign currency for Argentina and the labor sustainability of the manufacturing industry," they argue.

"This measure, similar to that provided by Decreto N° 9/2024 published in the Official Gazette, seeks to provide greater competitiveness to the sector, through greater equity between companies that export," they cite as an example, in reference to the suspension of withholdings applied to the dairy sector and its exportable derivatives.

Author: Nelson Saldivia | Revista Puerto (Translated from the original in Spanish)

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www.seafood.media

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